Thai Office Space Vacancy Rate Rises 26.3%, Yet Thailand’s Richest Billionaire Optimistic on Market Demand Growth

• 19 November 2024
• International News
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Bangkok’s office vacancy rate in prime Grade A buildings has soared to 26.3%, reflecting a growing oversupply, but Frasers Property Limited, led by Thailand’s wealthiest scion, is betting on the US-China trade feud to drive demand for office and industrial spaces across Southeast Asia, according to the Bangkok Post on 19 September 2024.

With a USD 3.6 billion investment in the ‘One Bangkok’ project, the largest real estate development in the country, CEO Panote Sirivadhanabhakdi expressed optimism that Southeast Asia will see a significant uptick in foreign direct investments, particularly from China and Singapore, boosting demand for commercial properties.

Panote, son of Thai billionaire Charoen Sirivadhanabhakdi, emphasized the region’s growth potential amid shifting global trade patterns with President Biden’s administration continuing to impose tariffs on billions of dollars worth of Chinese goods and former President Trump advocating for even steeper trade barriers, Southeast Asia benefits from increased foreign investment.

Despite this surge, the glut of office space persists, with vacancy rates in Bangkok’s central business district rising from 25.4% to 26.3% in the second quarter of the year. Ready-built warehouse vacancies also remain high, exceeding 21%.

Frasers Property, whose shares have dropped 2% this year amid global property downturns and rising interest rates, remains undeterred. The initial phase of the One Bangkok project, officially launched on 6 October 2024, includes three office towers and two retail zones, with one building already reporting 50% occupancy. Frasers and other regional developers hope the influx of foreign capital will help absorb the excess supply.

According to the Board of Investment, the Thai government reported an impressive 35% rise in foreign investment applications in the first half of the year, amounting to more than USD 3 billion, driven largely by Chinese and Singaporean investors.

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