Bad days for the boiler room : office demand weakening

Demand in Bangkok’s office market has started to slow down after constant growth the past three quarters as large companies scale down expansion plans, according to the international real estate firm Jones Lang LaSalle (JLL).

“The impact of the global economic meltdown has become more evident since the crisis erupted in October,” said Yupa Sathienpabayut, head of markets at Jones Lang LaSalle.

“Occupiers that were actively looking for office expansion opportunities over the first three quarters of the year are now cutting their growth and occupancy plans.”

While new demand for business expansion has contracted, demand for office space from new business setups has completely dried up.

Over the third quarter, JLL was involved in office leasing transactions totalling more than 10,000 square metres of space across Bangkok. Most of these transactions involved lease renewals and relocations.

Most of these companies are looking for ways to minimise occupancy costs through renegotiation of lease terms with landlords, relocation to a more affordable building or downsizing,” said Ms Yupa.The only good news was that so far there were no reports of multinationals shutting down their Bangkok offices, she said. (Bangkok Post)

So to summarize : no new tenants, and the old tenants want to renegociate prices, or relocate, or downsize…

Indeed, bad days for the boiler room…

But wait a minute ! How demand could fall ? It was supposed to increase, indefinitely, like prices, in a perpetual growth and prosperity, like the stories of a a never ending building in construction…

And Bangkok was supposed to be different ? Right ? Did someone lie to us ? 😉

Last point… the crisis didn’t pop up “last october“… Don’t be fooled by the boiler’s room lies… Last may, the same Jones Lang LaSalle was already speaking about “slow pace”, “unfavourable climate”So cut the crap

A crisis like we have now is a long process, a succession of growing imbalances… long cycles… until the tipping point. And then, boum. Burst.

It has been like this for forever. And it will continue. The boiler room can’t do nothing about it.

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Thailand Crisis

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But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.


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