Ploenchit-Chidlom-Wittayu zone maintains resilience in Bangkok market
Occupancy rates have dipped from a peak of 95% in 2019 to 76% currently
While a surge in office building construction across Bangkok has created uncertainty in the rental market, several Grade A office buildings within the prime Ploenchit-Chidlom-Wittayu zone continue to demonstrate robust growth.
This area, a magnet for multinational corporations and major tenants, remains a sought-after location despite the challenges.
Nattha Kahapana, managing director at Knight Frank Thailand, highlighted that while the overall office supply in Bangkok is increasing and hybrid work models are prompting many companies to downsize their office space, this particular zone continues to attract significant investor and tenant interest.
Although occupancy rates have dipped from a peak of 95% in 2019 to 76% today, buildings within this zone exhibit greater resilience compared to other areas of the city. Despite a 30% increase in supply over the past five years, reaching 220,000 square metres, this surpasses the CBD's overall growth rate of 24%.
The Ploenchit-Chidlom-Wittayu zone maintains its appeal due to its excellent connectivity, encompassing both exceptional public transport links and a concentration of green-certified Grade A office buildings.
"The presence of Grade A buildings in such a prime location fosters intense competition," stated Nattha. "However, this area continues to experience strong demand from large tenants. Despite the significant supply growth, rental demand has surged, with rental rates increasing by 5% to reach a Bangkok-wide high of 1,090 baht per square metre per month, reflecting persistent robust demand."
Looking ahead to 2029, the Ploenchit-Chidlom-Wittayu zone is poised for significant transformation. While new developments are limited, the upcoming CPN Siam Square project, slated for completion in 2027, will introduce over 25,000 square metres of office space.
The evolving office market is not solely driven by the volume of leasable space but also by a growing preference for high-quality buildings. Many large tenants and multinational corporations are seeking more premium spaces, aligning with the prevailing trends of lease renewals and office relocations within Bangkok.
Despite being more than five years old, Gaysorn Tower, Park Venture, and Siam Piwat Tower continue to demonstrate strong potential, commanding rental rates exceeding 1,300 baht per square metre per month and boasting occupancy rates above 90%. This underscores the enduring significance of building quality and location in attracting tenants, Nattha said.
One City Center (OCC), a Grade A office building completed in 2023, is currently garnering significant attention. While initial occupancy rates stood at 75% and 70%, this project is projected to experience substantial growth. Rental rates are anticipated to increase by 90% by 2025, positively impacting the long-term value of the property by generating stable returns.
