Turn Crisis into Opportunity – Now is a great time to find Real Estate bargains in Bangkok
Perhaps it’s a bit surprising, but Bangkok’s property market, along with nearly every other indicator of Thailand’s economy, continues to boom. This in the face of recent political instability, last year’s violent crackdown and what is increasingly looking like a global recession, and while all it takes is a trip to any one of the city’s malls to see the extent to which business is booming, the reality is the proliferation of new-start building projects is supply, rather than demand, driven. This is great news for tenants looking to cut costs!
Opportunity Knocks for Renters and Tenants
In the 20 years we’ve been in Commercial Real Estate here in South East Asia this is most certainly not the first “crisis season” we’ve seen and weathered here in Thailand and experience tells us it’s precisely in times like this that tenants and renters have the greatest opportunities for savings on their leases, as they’re opening bargaining position is far favorable to the landlords’.
Office and Retail spaces are in oversupply in Bangkok
As a Tenant Representative Commercial Real Estate company naturally we’re constantly studying the Thai property market, particularly in Bangkok, which is not only the country’s fiscal center, but also an important financial hub for the rest of South East Asia. Everything we’re seeing indicates that Bangkok has pockets of oversupply in terms of office and retail space. Naturally in these areas landlords and owners are more flexible towards tenants demands, creating a true opportunity for anyone savvy enough to realize what’s going on. Recently we’ve worked with a few of our clients to exploit these areas and have so far been able to generate savings totaling in the tens of millions of Thai Baht for two of the Multi National Corporations we’ve renegotiated office space leases for.
What’s driving current market trends?
The recent crisis coupled with the sorry state of the international economy are influencing MNCs to restructure and scale down their operations in Thailand. Increasingly we see companies showing interest in the Vietnam, Cambodia and Burma where overheads are still low even when compared even to China. Corporations are more reluctant than in the past to sign long-term lease deals in Bangkok, a fact Thai property owners and estate management companies are becoming painfully aware of.
The Landlords’ guarded secret
Typically property companies and landlords boast their high occupancy rates in order to pressure potential new tenants to agree to their terms. In simple terms they tell you:
“Hey look, we’re always full or nearly full anyway, if you don’t take the space at our asking price we can easily find someone else who will”, but the secret truth is many of their current leases are set to expire and tenants aren’t renewing, or if they are they’re reducing their space.
Behind closed doors Bangkok’s landlords are increasingly expressing concern about their occupancy rates in the near and medium term future.
How to make Bangkok’s property market work for you
Keeping a close eye on the occupancy levels in Bangkok’s oversupplied Real Estate regions and pitting property management companies and landlords into bidding wars over lucrative and security-generating mid- and long-term lease agreements is a winning strategy for generating significant saving in rent costs.
The amazing deals we’ve been able to arrange for our clients are the result of 3 major factors:
Very good intel – We truly have an intimate knowledge of occupancy rates in different parts of the city.
Very high requirements – We have extremely demanding requirements from the landlords insofar as how they’re to submit their bid for our client. Preparing a proposal for consideration by our clients is a Bangkok landlord’s worst nightmare.
Endurance – When negotiating we tirelessly go going back and forth between different landlords and property management companies and encourage them to improve their offer by hinting their competition is currently set to win the bid. Commercial real estate negotiations are often about simply out-enduring the other side. Because property managers invest so much energy and time in preparing an offer for us, in nine times out of ten when we offer them the opportunity to match or go below our clients’ other options they comply simply because they hate seeing their invested effort go to waste.
Renter, moving now = saving big $$$!
The conclusion of this post is simple: If you’ve got 18 months or less left on your current lease, you’re in an excellent position to get a much better deal on your next lease than you did on your last one. Speak to us now, you’ll be amazed by how much you stand to save on your future office, retail or industrial space. Remember this is our expertise – as Tenant Representative real estate company, we only get paid on results!