• The office building market is currently oversupplied. Plus Property advises operators to quickly adapt their buildings to meet the current demands of tenants.
  • With tenants holding the bargaining power, competition in the market has intensified. Building owners must adjust to market demands to increase their chances of being chosen by tenants.
  • Strategies for adaptation include dividing office spaces to accommodate various tenant needs, offering flexible building services that align with modern work behaviors, and elevating building standards to Smart Building and Green Building levels.
  • It is noted that the "physical attributes of the building" remain a crucial factor in tenant decision-making, but large-scale renovations are not always necessary. Focus can be placed on adjustments based on priority and budget.

Mr. Pakin Ekkathikom, Director of Building Resource Management at Plus Property Co., Ltd. stated that the current office building market in Thailand is highly competitive, with most bargaining power resting with tenants. Given the significant supply of office buildings still on the market, tenants are now considering not only location but also the price and quality of the building more seriously, which aligns with the current economic climate where organizations must manage costs carefully.

As a result, building owners need to adapt to market demands. In a situation where tenants have high selection power, buildings that can adapt quickly will have a competitive advantage. This also presents an opportunity for Grade B and C buildings to enhance their potential and increase competitiveness, making them top choices.

 

A key approach is to elevate building quality. For instance, a Grade C building can be upgraded to be closer to Grade B standards, or a Grade B building can be enhanced to approach Grade A standards to attract tenants. However, some factors are harder to change, such as location outside the city, but these can be compensated for by developing other aspects to enhance competitiveness.

Meanwhile, current work patterns are becoming more flexible, including office work, work from home, and the distribution of offices across multiple locations, leading to changes in space usage according to tenant behaviors.

Mr. Pakin indicated that the first approach is to divide office spaces into smaller rooms to accommodate organizations that do not require large areas, which will help increase rental rates and optimize space usage. This can be achieved through physical adjustments, such as subdividing larger spaces to cater to smaller organizations or startups that do not need extensive areas. For example, the Siriphinyo building managed by Plus has successfully adjusted its space allocation to improve rental efficiency.

Next, managing buildings to be more flexible is essential, without compromising standards or safety. This involves designing spaces that align with the usage patterns of modern tenants, such as part-time building access, office use during specific hours, accommodating overtime usage, and allowing electrical use outside of regular hours. Effective management systems are necessary to design regulations that best suit overall usage.

 

Another important factor is elevating buildings to meet both national and international standards, especially in environmental aspects, which play an increasingly significant role in tenant decision-making. This includes certifications like MEA ENERGY AWARDS, G-Green, as well as international standards such as LEED and WELL, which enhance the building's image and attract tenants, particularly organizations that prioritize sustainability measures, which are on the rise today. Additionally, incorporating new technologies for building management aims towards becoming a Smart Building.

However, the first factor that tenants still notice is the "physical attributes of the building." Therefore, modernizing the building's image remains important. It is not necessary to renovate the entire building, which requires significant investment; instead, specific areas can be targeted for improvement, such as the entrance, lobby, facade, common areas, and rental zones, which can be planned in phases according to budget.

Operators in today's market must adapt to customer demands and have a clear vision of the market, especially in a highly competitive environment where customers have bargaining power. Creating distinctive features for the building, adjusting rental strategies, and developing diverse spaces to generate additional income, such as opening restaurants, cafes, or increasing parking space, are all strategies to enhance revenue while improving the quality of life and convenience for building users.

Mr. Pakin believes that if operators can adapt to customer demands as outlined, whether the building is small or large, old or new, they can still enhance their competitive opportunities.