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Thailand: Property developer shrugs off at-home rise
The economic downturn has been a larger factor than the trend of working from home in causing a fall in office demand as the new behaviour does not fit with Thai culture, says property developer Golden Land Property Development.
Withawat Koottatep, executive vice-president for commercial development at Golden Land, said not everybody prefers working from home as boredom and stress are on the rise, and some have started to feel the pinch from higher electricity bills.
“Working from home has become a popular practice among Western countries for many years, particularly at tech firms. But in Asian nations, human contact is preferred,” he said.
Thais still want interpersonal interaction and see collaboration as a necessary tool to increase production efficiency. Mr Withawat expects working from home will subside after restrictions are eased.
In addition to higher electricity costs, other unexpected costs from working from home include office supplies, proper office furniture and WiFi.
“Working from home is not suited for many, particularly the younger generations,” he said. “Those renting an apartment will find it more difficult.”
In the post-virus era, Mr Withawat said an economic slowdown will be the major factor causing a drop in office demand as businesses close down or try to save on costs.
However, recent lease signings at Mitrtown Office Tower in Sam Yan helped the occupancy rate rise to 85% from 75% in March 2020.
Golden Land manages five office towers with a total of around 210,000 square metres that 20,000 people use daily.
Three are owned properties including Mitrtown, with a rental rate of 1,200 baht per sq m per month, and FYI Center in Klong Toey area with a rental rate of 900 baht per sq m per month and occupancy rate of 99%.
The other is Golden Land Building on Soi Mahad Lek Luang 1 with a rental rate of 600 baht per sq m per month and occupancy rate of 90%. The building is located on a leasehold plot contracted until August 2022.
Golden Land has two office towers sold into a real estate investment trust — Park Ventures on Ploenchit Road and Sathorn Square on Sathon Road — with rental rates of 1,600 and 1,250 baht per sq m per month, and occupancy rates of 100% and 97%, respectively.
As a large amount of new office supply will come onto the market in the next few years, including from Golden Land’s affiliate Frasers Property Holdings Thailand (owned by the Sirivadhanabhakdi family), Mr Withawat said office landlords should fill up vacancies as soon as possible.
Source: https://www.bangkokpost.com/business/1931516/property-developer-shrugs-off-at-home-rise