Bangkok office demand set to rise

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Bangkok office space has seen what property services firm JLL say was “remarkable” growth in demand from tech firms for locations in Bangkok.

This demand is only likely to accelerate in the near term, JLL noted, in response to the growing digital economy.

Understanding what tech firms are looking for from their office space will enable office property developers and investors to tap into better tap into demand from the tech sector.

Yupa Sathienpabayut, Head of Office Leasing at JLL, said: “Some 70 percent to 75 percent of leading tech companies in Bangkok are considered as large office tenants, occupying more than 1,000 sqm of space.”

“Leasing activity by tech companies has increased in recent years, with a number of long-established tech companies expanding, and many startups opening sizeable offices across the city”.

She added” “It is interesting to note that over the past few years, many tech occupiers have upgraded their premises from serviced to proper offices, and from older to newer buildings. Whether they are long-established businesses or startups, most of these companies focus on high-quality office space in close proximity to mass transit stations.”

Citing one example, G Tower on Ratchadapisek Road has easy access to an MRT station, and Huawei leased 10,000 sqm of space where it will open a new office later this year. Shopee, a leading online shopping platform, has also recently opened its new office with 4,000 sqm of space.

“The lease agreements for both companies were managed by JLL. We are also currently representing a number of tech companies in the office search and lease negotiation, with space requirements ranging from 1,000 sqm to 4,000 sqm,” said Yupa.

Her comments are supported by JLL research report by JLL. According to the report, tech firms realise a multitude of benefits from leasing high-quality space, such as efficiency, good image and branding for their company, and favourable working environment that helps boost productivity and retain and attract talent.

JLL’s research also unveiled findings from a survey on what tech firms look for when leasing office space. The findings identified the top three requirements that tech companies prioritise. These include power supply and backup, floor plate, and transit connection.

Power supply and backup
The importance of a high-quality and stable power supply provided by the building to tech occupiers cannot be understated. The volume of data that corporates are capturing and analysing has grown exponentially in recent years. Many tech firms continue to store large volumes of data onsite, meaning they are housing a large number of servers within their office. Power backup is essential to minimise downtime, loss of contact with servers housed offsite and ensuring the continuity of business operations. It is often facilitated by permanent electrical generators which automatically power on in the event of a brownout or blackout.

Floor plate
According to the survey, floor plate size and layout was the second most frequent tech specification. Tech firms want large floor plates with good layouts that allow them flexibility in their stacking plans. Larger, and more efficient, floor plates allow occupiers to lease comparatively less space than in buildings which feature smaller and more constrictive floor plates. In addition, tech occupiers frequently cite a related consideration when leasing space: room for expansion within the building. Floor plates that facilitate the flexible and efficient use of space can help landlords accommodate the growth needs of tech firms.

Transit connections
The war for talent has put pressure on tech firms to prioritise rail and bus transit connectivity when making a leasing decision. Corporates need to consider the effect of real estate on talent and our results indicate they also need to consider the accessibility of the buildings where they locate.

“The rapid growth of the digital economy will continue to fuel demand for office space from tech companies in Bangkok. Developers and investors that can demonstrate how their building meets tech occupiers’ major requirements will have a good chance to enjoy demand from this booming sector,” Ms. Yupa concluded.

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