Facing a critical oversupply that significantly outpaces demand, Bangkok’s office market is undergoing a profound transformation under pressure from a sluggish economy and changing occupier behavior. This imbalance, exacerbated by a robust influx of new supply and rising occupier expectations, is forcing the market to shift from the traditional “rental rates” to “building management efficiency.” This shift is becoming a key driver for the transition to green construction and certification, as evidenced by the growing popularity of “green” buildings.
According to Knight Frank Chartered (Thailand) Ltd., in the first quarter of 2025 alone, office supply increased by 524,000 sq. m, bringing the total to 6.314 million sq. m, clearly indicating a “demand lag” phase. As Panja Cenkitwathanalert of Knight Frank points out, the market is at a turning point and despite some positive trends such as a slight increase in rental rates in certain segments, the influx of new supply is significantly changing the competitive landscape, making effective management by building owners a critical success factor.
A location analysis shows that Silom-Sathorn-Rama 4 has seen the biggest growth in the central business district, where rental rates have increased and occupancy rates have reached their highest levels. In contrast, areas such as Ploenchit-Chidlom and Asoke-Nana have seen a slight decline in occupancy rates, indicating a gap between the ‘winners’ and those ‘needing to adapt’ in a competitive market.
According to Knight Frank Chartered (Thailand) Ltd., in the first quarter of 2025 alone, office supply increased by 524,000 sq. m, bringing the total to 6.314 million sq. m, clearly indicating a “demand lag” phase. As Panja Cenkitwathanalert of Knight Frank points out, the market is at a turning point and despite some positive trends such as a slight increase in rental rates in certain segments, the influx of new supply is significantly changing the competitive landscape, making effective management by building owners a critical success factor.
A location analysis shows that Silom-Sathorn-Rama 4 has seen the biggest growth in the central business district, where rental rates have increased and occupancy rates have reached their highest levels. In contrast, areas such as Ploenchit-Chidlom and Asoke-Nana have seen a slight decline in occupancy rates, indicating a gap between the ‘winners’ and those ‘needing to adapt’ in a competitive market.
Thailand’s projected economic growth rate in 2025 is the slowest in many years, at just 2%. This conservative forecast assumes that international trade tax issues remain under control. However, if the US were to raise taxes, growth could slow to 1.3%. With so much uncertainty, many companies and office tenants are slowing their expansion plans, looking for offices that offer not only competitive pricing but also added value. The Business Sentiment Index (BSI) for the first quarter reflects this volatility: while the manufacturing sector is showing increased confidence thanks to increased exports ahead of potential tax hikes, the services and tourism sectors remain volatile.
Unprecedented Influx of New Supply into Bangkok Office Market
Amid ongoing economic weakness, Bangkok’s office market is set to see an unprecedented influx of new supply in 2025, with a record 524,000 square meters of new office space expected to hit the market. In Q1 2024 alone, the total office supply has already increased to 6.314 million square meters, thanks to new buildings such as WorkLab on Rama 4. In addition, with 1.1 million square meters under construction (including major projects such as GR9 and The Central), the market will continue to experience significant supply pressure in both the medium and long term.
Shifting Tenant Priorities and Growing Demand for Green Offices
While the overall office market in Bangkok appears relatively stable with a net absorption of 31,000 square meters and an average occupancy rate of 77.5%, there is a significant shift in tenant behavior. Tenants are becoming significantly more selective, with rents no longer the sole determining factor. This is particularly noticeable in green-certified buildings, where net absorption increased by 51,000 square meters. Meanwhile, traditional office space saw net absorption decline by 17,000 square metres, highlighting the growing demand for modern, sustainable and value-based spaces that take into account not only cost efficiency but also employee wellbeing and corporate social responsibility. This reflects the growing importance of ‘sustainability’ for occupiers in today’s market.
Class A buildings with outstanding characteristics are seeing strong growth, with occupancy rates increasing by 2.1% to 78%. However, Class B buildings continue to face challenges, with occupancy rates remaining stable at 76%, highlighting the pressure mid-tier buildings are feeling on both ends.
In particular, outside the traditional central business districts (CBDs), locations such as Bangna-Srinakarin are seeing the most notable growth in occupancy rates, up 1.4%. This uptick reflects new opportunities in areas with lower rental costs and better transport links, signalling businesses are strategically adapting to the changing environment.
However, despite the positive figures for the first quarter, the approaching second half of 2025 will be a real test for office building owners. Although the data does not yet point to an impending "crisis", the sector faces a number of interconnected challenges. The expected influx of new supply before the end of the year will test the ability of "old" buildings and incumbent operators to adapt. This is especially true as tenants become increasingly selective, prioritizing "usability" and emergency preparedness over rental prices alone.
International trade policy adds an additional factor of uncertainty. In the event that long-term taxes are reintroduced under a possible Trump presidency, multinational companies may postpone leasing decisions or start looking for more flexible and cost-effective spaces.
Thus, 2025 is not just a period of recovery from the COVID-19 pandemic, but also a "testing year" for office building owners. It will show who is really capable of meeting the complex requirements of modern tenants in terms of functionality, sustainability, security and service readiness. Operators that stick to outdated models and fail to adjust their strategies may find themselves at a disadvantage in a market where competition is now based on deep capabilities and innovation, not just location or price. In today’s office market, success is not about being the biggest player, but about being as nimble and responsive as possible to the ever-changing needs of occupiers.
Unprecedented Influx of New Supply into Bangkok Office Market
Amid ongoing economic weakness, Bangkok’s office market is set to see an unprecedented influx of new supply in 2025, with a record 524,000 square meters of new office space expected to hit the market. In Q1 2024 alone, the total office supply has already increased to 6.314 million square meters, thanks to new buildings such as WorkLab on Rama 4. In addition, with 1.1 million square meters under construction (including major projects such as GR9 and The Central), the market will continue to experience significant supply pressure in both the medium and long term.
Shifting Tenant Priorities and Growing Demand for Green Offices
While the overall office market in Bangkok appears relatively stable with a net absorption of 31,000 square meters and an average occupancy rate of 77.5%, there is a significant shift in tenant behavior. Tenants are becoming significantly more selective, with rents no longer the sole determining factor. This is particularly noticeable in green-certified buildings, where net absorption increased by 51,000 square meters. Meanwhile, traditional office space saw net absorption decline by 17,000 square metres, highlighting the growing demand for modern, sustainable and value-based spaces that take into account not only cost efficiency but also employee wellbeing and corporate social responsibility. This reflects the growing importance of ‘sustainability’ for occupiers in today’s market.
Class A buildings with outstanding characteristics are seeing strong growth, with occupancy rates increasing by 2.1% to 78%. However, Class B buildings continue to face challenges, with occupancy rates remaining stable at 76%, highlighting the pressure mid-tier buildings are feeling on both ends.
In particular, outside the traditional central business districts (CBDs), locations such as Bangna-Srinakarin are seeing the most notable growth in occupancy rates, up 1.4%. This uptick reflects new opportunities in areas with lower rental costs and better transport links, signalling businesses are strategically adapting to the changing environment.
However, despite the positive figures for the first quarter, the approaching second half of 2025 will be a real test for office building owners. Although the data does not yet point to an impending "crisis", the sector faces a number of interconnected challenges. The expected influx of new supply before the end of the year will test the ability of "old" buildings and incumbent operators to adapt. This is especially true as tenants become increasingly selective, prioritizing "usability" and emergency preparedness over rental prices alone.
International trade policy adds an additional factor of uncertainty. In the event that long-term taxes are reintroduced under a possible Trump presidency, multinational companies may postpone leasing decisions or start looking for more flexible and cost-effective spaces.
Thus, 2025 is not just a period of recovery from the COVID-19 pandemic, but also a "testing year" for office building owners. It will show who is really capable of meeting the complex requirements of modern tenants in terms of functionality, sustainability, security and service readiness. Operators that stick to outdated models and fail to adjust their strategies may find themselves at a disadvantage in a market where competition is now based on deep capabilities and innovation, not just location or price. In today’s office market, success is not about being the biggest player, but about being as nimble and responsive as possible to the ever-changing needs of occupiers.
