Office supply over 3 years, 1.6 million sq m. "Frasers" renovates 2 grade A offices.

Offices for rent are expected to add 3 million sq m to the market in 1.6 years, pushing supply to overflow. Contrary to demand, Frasers invests 200 million baht to renovate 2 office buildings. Sathorn Square-Park Ventures Towards an A+ grade office, attracting potential customers

On August 6, 2024, Mr. Witawat Kuttathep, Assistant Chief Executive Officer, Commercial Projects Division, Commercial Real Estate Group, Frasers Property (Thailand) Public Company Limited ( FPT), revealed that the current supply of office space for rent is 9.61 million square meters, and in the first quarter of 2024 alone, 96,302 square meters of supply will gradually become available.

As for future supply, it is estimated that it will expand to 4 square meters by the end of this year, while in the next three years it is expected that there will be an additional 5 million square meters of office supply.

Year 2567, Office rental market overview There is an average rental rate of 82%, but demand remains the same or decreases. When combined with a high supply overflow Causing the average rental rate to decrease from 2566 at 85%.

For Frasers, there are 5 offices for rent: Samyan Mitrtown, Silom Edge, FYI Center, Park Ventures Ecoplex and Sathorn Square, with a total leasable area of ​​2.4 square meters. Rental rate 90%

From the overall picture of increased competition, the company had to adapt by deciding to renovate 2 office buildings that were 10 years old or more, namely Sathorn Square Building. and the Park Ventures Building, under an investment budget of 200 million baht, adjusted from a grade A building to a grade A+ building, resulting in the company Can attract leading companies and able to compete in the market

After facelift The average rental price of both buildings has increased approximately 2-3% per year, while currently the company There is a high rate of old customers renewing contracts of 5-80%.

Mr. Wittawat further said that Currently, competition in the office rental market is high. Many old buildings have been renovated to increase their building grade, such as from Grade B to Grade A, as well as adjusting to green buildings. As for entrepreneurs who do not adjust, they may use price competition strategies. Each grade of building in the CBD zone has different rental prices as follows:

• Building A+ Rental price 1,125 baht/sq m/month
• Building A Rental price 915 baht/sq m/month
• Building B Rental price 721 baht/sq m/month

However, many industries have been affected by the economic situation, such as the automobile business and the FMCG group, causing office rentals to be reduced. or reduce the size of office rental to lean costs

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