Bangkok's office market in the first quarter of 2025 continued to face mounting pressure from new supply, resulting in higher vacancy rates and intensifying competition among landlords, according to property consultancy CBRE Thailand.
The earthquake in Myanmar on March 28, which was felt across Bangkok, added a new dimension to office decision-making, prompting companies to re-evaluate their priorities and requirements in the wake of heightened safety concerns.
"While significant new supply continues to pressure occupancy levels, net take-up in the first quarter was particularly strong, driven by relocations into Grade A+ buildings in the central business district (CBD) and Grade A buildings in both CBD and non-CBD areas," said Chotika Tungsirisurp, head of consulting and research at CBRE Thailand. "In contrast, the Grade B office segment experienced negative net take-up."
With the earthquake adding new urgency to these market shifts, CBRE identified three major factors influencing the Bangkok office market since the event. First, structural safety has become a focus for both existing and prospective office tenants, said Maneerat Vichitrattana, senior director of office services.
"The number one priority for existing tenants was to ensure their landlords conducted thorough checks of the building structure so that it could be declared safe, in accordance with the Bangkok Metropolitan Administration's announcement, and used as normal," she said.
Second, the quality and clarity of landlord communication have become essential. In the aftermath of the quake, landlords were expected to provide timely, clear and concise updates through multiple channels to keep tenants informed and reassured about the actions taken.
Landlords are now expected to develop and disseminate clear earthquake protocols as part of the office manual for all tenants.
Following the earthquake, many landlords set a strong example by promptly using embedded technology and a variety of channels -- including building mobile apps, digital displays, social media accounts and conventional email -- to keep tenants updated and confident in the building's response.
Third, CBRE noted a shift in office preferences and additional requirements from companies that previously decided to remain as tenants in their buildings.
"Since the earthquake, some companies seeking new office premises have shifted their preference to low-rise buildings or lower floors in high-rise buildings," said Ms Maneerat.
"We are also seeing more companies consider relocating from certain older buildings affected by the earthquake. While some office leasing transactions proceeded as planned in the weeks following the earthquake, others have been delayed as companies seek assurances from potential new landlords due to interruptions in some building services."
Most office buildings in Bangkok proved to be structurally sound and resilient.
However, landlords who provided timely reassurance of building safety, communicated clearly with their tenants, and quickly undertook any necessary repairs have enhanced their buildings' standing in the market, according to CBRE Thailand.
Conversely, buildings with management that did not communicate well or reassure their tenants in the aftermath of the earthquake are likely to be more vulnerable to tenants considering relocation.
As safety becomes the most important sign of quality, the earthquake is expected to extend and accelerate the "flight to quality" trend in Bangkok's office market, said the consultancy.
"Inevitably, this will prompt landlords of older buildings to consider adopting alternative strategies for their properties," said Nicholas Vettewinkel, senior director of consulting and research and a specialist in strategic asset advisory at CBRE Thailand.
