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Published on April 3, 2008

London has the most expensive office rents in the world, at more than Bt10,000 per square metre per month.

Bombay is the most expensive city in Asia with monthly grade-A rents of almost Bt6,000 per square metre.

Meanwhile, Singapore rents increased by 100 per cent in 2007 to about Bt3,800 per square metre per month, overtaking Hong Kong rents which rose to Bt3,600.

Rents in Ho Chi Minh City also doubled, rising to Bt2,300 per square metre, which is almost three times more expensive than Bangkok.

Demand for office space in Bangkok is starting to recover with an increase in the number of transactions. The increase in the amount of leased space was about 158,000 square metres in 2007, which is half the average new take-up achieved per year between 2000 and 2005. Supply increased by only 88,500 square metres in 2007.

The limited amount of new supply supported office rents despite weak demand and rental levels remained flat in 2007, with the monthly average for grade-A space in the central business district of Bt740 baht per square metre.

Bangkok rents had been rising at 15-20 per cent per year since 2000, but growth slowed in 2006 and rents were flat in 2007 due to weak demand.

"Demand fell because of the political uncertainty, weak economic growth and proposed amendments to the Foreign Business Act, which would have further restricted foreign ownership of companies in the services sector, " said Nithipat Tongpun, director and head of office services at CB Richard Ellis Thailand.

However, the company believes demand for the Bangkok office market faces more challenges this year. The global credit crisis has meant that many multinational companies are looking very carefully at costs and getting approval to expand or set up new businesses will become increasingly difficult, Nithipat added.

The Nation