Property agency Knight Frank Thailand has confidence demand for grade A office space in Bangkok will rebound in the fourth quarter of this year after a decline in the first half of this year, Marcus Burtenshaw, executive director and head of the commercial agency department at Knight Frank Thailand Co Ltd said.
The decline in demand in the first half was the first such drop in three years.
Knight Frank yesterday launched the Asia-Pacific Prime Office Rental Index for Q2 2017. The index increased 1.2 per cent quarter on quarter and 0.6 per cent year on year as at the end of the second quarter, but Bangkok showed a decline in the second quarter of this year, by 0.2 per cent, from the first quarter.
Nicholas Holt, head of research for Asia-Pacific, says the pickup in global trade and domestic demand has negated geopolitical risks to a certain extent, thereby providing a strong foundation for the Asia-Pacific prime office markets.
The increase in the index was the result of rising rents in 15 of the markets over the quarter, with rental declines experienced in two (Bangkok and Kuala Lumpur) of the 20 markets tracked, he said.
He added that Phnom Penh topped the chart this quarter at a 4.2 per cent increase quarter on quarter, compared to a flat performance in the last quarter. The completion of Exchange Square not only set a new benchmark standard for grade A offices, but its strong pre-commitment level also boosted prime rental levels in the Cambodian capital.
“Over the next 12 months, we expect rents in 15 cities out of the 20 tracked to either remain steady or increase, which is the same as our previous forecast,” he said.