In a significant development for Bangkok’s commercial landscape, two major office projects are set to reshape the city’s Grade A office market by the end of 2025, introducing an impressive 161,000 square meters of new stock. According to a recent report from JLL, this expansion is expected to bring the total office space in Bangkok to approximately 1.8 million square meters.
As the market braces for an influx of new office space, the year-end vacancy rate is projected to hit a daunting 30%, surpassing earlier predictions. This spike in vacancies can be attributed to wavering business confidence and a steady stream of incoming supply.
JLL highlights that the new and upcoming additions to the market are likely to drive rental growth, albeit against a backdrop of price sensitivity as occupiers closely monitor their expenses. The report also notes that capital values are expected to experience marginal compression, reflecting the cautious sentiment of investors navigating these uncertain times.
Bangkok’s prime office market recorded a net absorption of just 9,800 square meters in Q2 2025, a staggering decline of 42.9% from the previous quarter. This downturn signals a notable slowdown in leasing activity, with many tenants choosing to hold onto their current spaces rather than commit to new leases. The aftershocks of the recent earthquake appear to have further amplified this wait-and-see mentality among businesses.
New leasing activity during this quarter was predominantly driven by newly completed projects like One Bangkok Tower 4 and Grande Centre Point Lumphini. In contrast, the broader market experienced only flat to minimal occupancy changes.
Bangkok welcomed a new addition to its skyline with the completion of APAC Tower, which introduced an additional 32,400 square meters of space, achieving around 20% pre-commitment. The total prime office stock in the city has now reached 1,603,000 square meters. However, with this new supply, the prime vacancy rate has surged to 28.6%, reflecting an increase of 84 basis points quarter-over-quarter. This trend is expected to persist as older buildings struggle to compete with the appeal of new premium options.
Amidst these shifts, prime gross rents in the Central Business Area (CBA) saw a slight decline of 0.4% quarter-over-quarter in Q2 2025, dipping to THB 1,025 per square meter. Prime net effective rents also experienced a downturn, falling by 0.3% to THB 784 per square meter per month. Average rent-free periods reached two months, which could be seen as a silver lining for tenants seeking favorable terms.
In contrast, capital values have held steady compared to the previous quarter but have increased by 3.2% year-over-year, now sitting at THB 167,000 per square meter. This stability underscores the ongoing pressures linked to development costs, economic uncertainties, and the prevailing cautiousness among investors.
What are the expected impacts of the new office projects in Bangkok?
The introduction of 161,000 square meters of office space is expected to escalate vacancy rates to around 30% by year-end, reflecting increased supply and softened business confidence.
How did the leasing activity in Q2 2025 compare to previous quarters?
Leasing activity saw a significant downturn, with net absorption dropping by 42.9% quarter-over-quarter, indicating a cautious approach from tenants following recent market disruptions.
What trends are emerging in rental rates and capital values?
Prime gross and net effective rents have slightly decreased, while capital values remain stable on a quarterly basis but have risen year-over-year, suggesting a complex market landscape for stakeholders.
