Bangkok’s Office Vacancy Rates Climb, But Frasers Property Bets on Regional Growth

Bangkok’s prime Grade A office buildings have seen vacancy rates spike to 26.3%, signaling a growing oversupply in the market. Nevertheless, Frasers Property Limited, under the leadership of Panote Sirivadhanabhakdi, is optimistic that the ongoing US-China trade tensions will boost demand for office and industrial properties across Southeast Asia.

With a $3.6 billion investment in the ambitious ‘One Bangkok’ development—the largest real estate project in Thailand—Panote expressed confidence that Southeast Asia would experience a rise in foreign direct investment, particularly from China and Singapore, which he believes will drive demand for commercial real estate. As the son of Thai billionaire Charoen Sirivadhanabhakdi, Panote highlighted the region’s potential in the face of shifting global trade dynamics.

Despite expectations of increased foreign investment, Bangkok’s office space surplus continues, with vacancy rates in the central business district climbing from 25.4% to 26.3% in the second quarter of this year. Vacancies in ready-built warehouses also remain elevated, exceeding 21%.

Frasers Property, whose stock has declined by 2% this year amid a global property slump and rising interest rates, is pressing ahead with its plans. The initial phase of the One Bangkok project, which is scheduled for an official launch on October 6, 2024, will feature three office towers and two retail zones. One of the buildings has already achieved 50% occupancy. Frasers and other regional developers are hoping that a steady flow of foreign capital will help mitigate the excess supply in the market.

The Thai government has reported a robust 35% increase in foreign investment applications during the first half of the year, totaling over $3 billion, with Chinese and Singaporean investors leading the way, according to data from the Board of Investment.

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