SET-listed Golden Land Property Development Plc (GOLD) will complete an office tower at Samyan Mitrtown with a lettable area of 48,000 square meters in October 2019, three months faster than scheduled.
President Thanapol Sirithanachai said the completion of the tower ahead of schedule or in the fourth quarter next year instead of the earlier-scheduled first quarter of 2020 will help speed the take-up rate, as new office supply for next year remains low.
“From this year and next, new office supply in the central business district (CBD) will be minimal when compared with that in 2020-23,” he said. “Opening the tower faster means taking demand earlier.”
According to property consultant CBRE Thailand, about 1.75 million sq m of new office supply is under construction for completion during 2018-23. Of the total, 905,640 sq m will be in the CBD and 844,020 sq m will be non-CBD.
In 2018 and 2019, 93,050 and 50,000 sq m of CBD office supply will be completed, respectively. In non-CBD locations, there will be 113,800 and 58,600 sq m completed in those years.
A large amount of new office supply in the CBD will be completed during 2020-23, with 138,000 sq m in 2020, 112,840 in 2021, 379,000 in 2022 and 177,750 in 2023. The new supply will challenge rents and vacancy rates in those years.
As of the end of 2017, the vacancy rate of Grade A office buildings in the CBD was 7.5%, or a take-up of 1.23 million sq m from a total supply of 1.33 sq m, the lowest in history.
Rental rate also reached a new high of 994 baht per sq m per month on average, Mr Thanachai said.
At the same time, new office demand per year is expected at 200,000 sq m after 194,200 sq m in 2017.
The office tower at Samyan Mitrtown will have 31 storeys with a net lettable area of 48,000 sq m and a rental rate of about 1,000 baht per month each. Golden Land expects the tower to generate 600 million baht a year when occupancy is full.
This year, the company aims to have 15% growth in rental revenue from commercial properties to 1.7 billion baht, with rental revenue from FYI Center on Rama IV Road reaching 100% from 50% last year.
With a total lettable space of 210,000 sq m, commercial properties include the Golden Land Building on Soi Mahadlekluang 1, Park Ventures on Wireless Road, Sathorn Square at Chong Nonsi skytrain station and FYI Center.
By mid-2019, the company will launch a 33-storey condominium tower with 516 units at Samyan Mitrtown for sales with a single size of 34 sq m for a 30-year lease contract and 104 hotel rooms in the same building.