It said this was mainly because the persistent political and economic uncertainty had caused companies to put their expansion plans on hold.

Suphin Mechuchep, managing director of Jones Lang LaSalle Thailand, said the impact of the political uncertainty on the economy was becoming increasingly evident. The country's growth forecast for its gross domestic product has been revised downwards to 3-3.5 per cent from an earlier forecast of 4-4.5 per cent following declines in consumption and private investment. The impact is now being felt by the Bangkok office sector, which has seen lower levels of new demand.

"While companies in general have major concerns about the softening economic outlook, foreign businesses are also anxious about the proposed revisions to the Foreign Business Act," Suphin said. "All these issues have discouraged expansion by both local and multinational companies this year, resulting in slower growth in demand for office space."

It is hard to predict to what extent the Bangkok office market will be affected by current conditions, she said.

Optimistically, if the new economic-stimulus measures launched by the government are successful, proposed revisions to the Foreign Business Act are more efficiently communicated to foreign businesses, and a new election takes place as scheduled, investor confidence may recover, and the Bangkok office sector will benefit, she said.

Jones Lang LaSalle's latest study shows the average vacancy rate of office space in Bangkok's central business district (CBD) fell from 12.9 per cent in January to 11.4 per cent last month.

However, this was mainly because 16,500 square metres of office space in the Thai Wah II Tower was converted for hotel use, with tenants relocated to other office buildings. No new supply of office space was completed in the CBD in the first quarter.

The average rent for grade-A office premises in the CBD rose only slightly, from Bt660 a square metre per month in January to Bt666 last month. With less-favourable trade conditions and slower growth in demand, landlords have become less aggressive about raising rental rates, in an effort to ensure that existing tenants do not relocate, the firm said.

Rental increases for the rest of the year are expected to be minimal in anticipation of a new supply of office space in the second half and during next year.

Jones Lang LaSalle's study shows the total stock of office space in Bangkok stood at 7.4 million square metres last month. Four new office developments offering a combined 139,500 square metres of rental space are scheduled for completion this year.

The Athenee Tower, with 45,000 square metres of rental space, is the only one of them inside the CBD.