Office Market Q1 2025

Market Overview

The Thai economy is expected to slow in 2025 amid heightened global uncertainty driven by evolving U.S. trade policies and potential retaliatory measures, which are reshaping global trade, reducing efficiency, and dampening growth prospects. The impact of these tensions is likely to intensify in the second half of the year, with Thailand’s growth projected at 2% under a lower-tariff scenario and just 1.3% if tariffs rise further. Meanwhile, subdued tourism and tightened financial conditions add to domestic pressures, prompting the Bank of Thailand to lower its policy rate by 0.25% pts. to support the weakening outlook. Headline inflation is projected to fall below target due to supply-side factors and government subsidies, though risks from protectionism and supply chain shifts could affect future inflation trends. The central bank remains concerned about deteriorating credit conditions and increased financial market volatility, and emphasizes the need for responsive, coordinated policies to mitigate trade-related shocks and preserve economic stability.

The Business Sentiment Index (BSI) rose in March, reflecting improved sentiment in the first quarter, primarily supported by stronger confidence in the manufacturing sector. This uptick was partly due to accelerated exports ahead of the U.S. reciprocal tariff set to take effect in April. In contrast, sentiment in the non-manufacturing sector declined, led by weakness in tourism. Meanwhile, the 3-month forward BSI remained stable compared to the previous quarter.

Supply

Bangkok’s total office supply rose to 6.314 million sq m following the completion of WorkLab on Rama 4 Road, marking a 3.1% annual increase. Green-certified office space also grew to approximately 2.1 million sq m, with the main source coming from older buildings completing upgrades and obtaining green certifications. Meanwhile, Ladprao Hills will be converted into hotel space entirely, removing 6,000 sq m from total supply.

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