Sathorn Square : Bangkok's first large office tower development in years

The Bangkok office market was the hardest hit Thai real estate market during the 1997 Asian financial crisis. The vacancy rate reached 40%. There were several years of very high vacancy rate after that.

Over the last two to three years the market has recovered to the point where the market is tight (vacancy tighter) and there are fewer and fewer vacancies and possibly even a shortage of downtown office space. Supply has become a limiting factor. Statistics back this up:
The net take-up rate of additional office space from 2000 to 2005 averaged 310,000 square metres per year. Although the situation has been difficult over the last two years, Bangkok has still seen take-up averaging 180,000 sq m a year.

Supply has become the limiting factor in Bangkok's market for office space because only one office tower has been built in Bangkok since the Asian financial crash.

Those office towers already built are almost never available for sale. Owners are unwilling to sell their properties because this could be seen as a sign of financial difficulties.

Compared to other popular locations in Asia for corporate headquarters such as Singapore and Hong Kong, Bangkok's office rental rates are among the lowest and most affordable. Bangkok is still an attractive location for institutional property investors looking for international-standard office buildings.

An additional new regulatory factor may make building new office buildings even less likely in the future. Rumours suggest Environmental Impact Assessment (EIA) regulations will change to require all buildings of more than 10,000 square meters to get EIA approval. This will likely lengthen the development for any new office building.

The new Sathorn Square office tower

Sathorn Square, scheduled for completion in 2010, is the only office tower that has been built recently (See artist's impression of the completed building on the right).

The target rent for the Sathorn Square building, with a net space of 72,000 sq m, starts in the range of 800 baht per square meter per month and will rise as the building fills up.
The office tower will also have large floors of 2,000 sq m, something many large companies prefer for consolidating operations over fewer floors.

To keep the height of the development down, the five story car park is located underground.
The design uses sweeping curves to "draw your eye upward" and prevent the building from looking fat or big and blocky.