Demand For City Offices Increased Among Foreigners
Foreign investors in Bangkok are not only known to acquire hotel in Ploenchit but they are also now focusing on other investment options such as the office buildings within the capital city of Thailand. There is now a supply shortage in the area because of the lowest rate of vacancy, which resulted to the rise in rent prices. This information is according to JLL Thailand which is a property consultant firm.
According to SuphinMechuchep, the managing director of the firm, the investors coming from countries such as United States, Singapore and the Middle East are showing too much interest during the beginning the year. They are in search of office towers all over Bangkok as a source of investment. They are willing to put in as much as 10 billion baht for every property and a minimum of 3 billion baht.
She explained that those office buildings with very little space are not a very good option because many are not interested as these are deemed to be impractical when it comes to investing. They are targeting buildings with spaces between 27,000 and 90,000 square meters. The locations in the central business district as well as properties with grade A are on top of their list. They also prefer to purchase office spaces that are designed to be mixed-use.
Investors are eyeing Bangkok more than any other major cities because they think that the office sector in the capital will be able to generate more profit for them business-wise. It is estimated that the yield in the capital will reach between 6.5 to 7 per cent annually while in other cities it is only between 2 and 3 percent.
The high yield is brought about by the increase in rental prices as well as the shortage of new supplies that have only been completed in the past number of years. Mechuchep also said that almost all office landlords are not willing to give up their investments as of the moment.It would be easier to purchase a hotel in Ploenchit than to find an office space in the area because of the current status of the market.