Firms flee trade war, relocate to Thailand
Co-working spaces in Bangkok will rise by 50% over the next two years as many overseas firms move to Thailand because the US-China trade war is escalating, says property consultant Colliers International Thailand. Phattarachai Taweewong, Colliers' associate director of research, said exponential growth in co-working space supply in Bangkok will be spurred by international operators.
"Despite an economic downturn, big co-working space players continue expanding their spaces in Bangkok as Thailand is a new production base for businesses relocating amid the trade war," he said. Companies planning to shift to Thailand are looking for office space to rent to set up their operations.
These companies will likely choose co-working spaces instead as Bangkok's office market has a limited supply, particularly grade A spaces in central business district (CBD) locations. Overall vacancy rates for Bangkok offices have been lower than 10% during the past six years, the lowest in the past decade, said Mr Phattarachai.
"These companies will use co-working spaces until new office supply enters the market over the next few years," he said.
"Some firms want to attract talented people who prefer using co-working spaces."
According to market research by Colliers, there will be at least 50,000 square metres of new co-working space supply in the Bangkok office market by 2021. Of the new supply, 78% will come from two big players, including WeWork from the US, with a combined 20,000 sq m at five locations comprising Spring Tower and Siripinyo Building in the Ratchathewi area, Suthi Building on Petchaburi Road, The Parq on Rama IV Road and Vanissa Building on Chidlom Road.
Singaporean operator JustCo will operate 19,000 sq m in three towers: Silom Center Building on Silom Road, Amarin Tower near the Ratchaprasong intersection and Samyan Mitrtown in the Sam Yan area. Samyan Mitrtown will be the largest, with 12,000 sq m opening next month.
"To draw demand, co-working spaces should be convenient to reach. They should be within walking distance of a mass transit station. Having educational institutions nearby is a plus," said Mr Phattarachai.
Some retailers were interested in having co-working spaces in their shopping complex in the CBD areas to increase shopping traffic on weekdays. After forming a joint venture with Malaysian co-working space operator Common Ground late last year, Central Pattana will open co-working spaces in two locations comprising CentralWorld with 1,500 sq m and G Tower near Rama IX MRT station with 4,500 sq m. According to Colliers, the number of co-working space locations will total more than 140 by the end of 2019, up from 120 with a total of 108,370 sq m at the end of 2018. More than 90% were near current mass transit line stations and 88% were at grade A office towers in the CBD. Demand has risen the past few years, with Sukhumvit, Siam, Silom and Sathon seeing a high occupancy rate.