The office market in Bangkok is active again after a long recovery period following the 2008 global financial crisis.
New demand or take-up per year increased from 160,000 square metres in 2012 to around 220,000sqm last year, whereas supply to be completed between 2014 and 2016 is estimated at 450,000sqm only.
The average rent for Grade A offices in the central business district has risen to Bt820 per square metre and for Grade B offices in the CBD the amount is Bt560 per square metre, which represents increases from 2012 of 7 and 9 per cent respectively.
Large tenants are aware of the future shortage of Grade A and B offices in prime locations near mass-transit stations. This is shown by the higher level of pre-letting (signing leases before a building is completed) in developments due to be completed by the end of this year or early in 2015, such as the Bhiraj Tower at EmQuartier on Sukhumvit and the AIA Capital Centre on Ratchadaphisek Road.
When looking to lease new office space, a company should make sure that it really serves the needs of the company in terms of financials, convenience, utility for clients and staff, and corporate image and branding.
Below are the guidelines when choosing a new office:
l Check the travelling time during rush hour by car and by mass transit to determine which building would fit the company’s requirements.
l If you want to appoint a project manager who will coordinate the fitting out of your office and an interior designer, you should do it at an early stage.
l Check to see if your company’s headquarters has an environment policy requiring LEED (Leadership in Energy and Environmental Design) certification for new buildings.
l Check the basis of measurement of space for each building.
l Ask for the floor plan of each building and have an interior designer draft the layout of workstations and required functions to determine the required space.
l Check the security system of each building to see if it serves your safety requirements.
l Check the waiting time for elevators, especially during peak hours.
l Verify car-parking allocations, regulations and fees for the benefit of your staff and clients.
l Find out electricity and air-conditioning costs during and after office hours.
l Inspect the mobile-phone signals in the office space and in other common areas of the buildings.
l Check the food and beverage facilities in the buildings and nearby areas for the benefit of staff and clients.
l Determine the capacity of emergency generators and the allocation of costs to tenants.
l Check who pays for property taxes.
l Identify the other tenants in the buildings to ensure that there are no undesirables or direct competitors.
l Observe property-management services in the buildings.
l Conduct cost analysis of rents and other expenses to compare with each building on the same basis.
The above processes could all be done for existing buildings, but may not be applicable in pre-lease situations. In such a case, questions should be raised by the company, to which written answers should be provided by the landlord.
Timing is also another critical factor. Companies should obtain information on the office-market cycle and rental movements.
As companies do not move office often, it is imperative to ensure that they make the right choice.
The bottom line in selecting a new office space is the adequacy of the building’s services and facilities in meeting the company’s requirements with a rent that will not exceed its budget.