Bangkok Commercial Office Property: Literature Review and Strategic Implications (2010–2025)

Chakrapan Pawangkarat

Head of Property and Asset Management, JLL Thailand

Secretary-General, Property Management Association of Thailand

11 August 2025

1. Introduction

The commercial office property sector in Bangkok is undergoing a structural transformation shaped by shifting occupier priorities, global economic cycles, regulatory developments, and rapid technological change in the workplace. Traditionally anchored in long-term leasing of centrally located Grade A towers, the market is now being redefined by hybrid work patterns, sustainability imperatives, and an emerging bifurcation between high-quality, ESG-compliant assets and older, less efficient stock.

Global literature consistently points to the fact that office demand is no longer driven purely by economic expansion or headcount growth. Instead, occupiers are seeking quality, flexibility, health and wellness features, and sustainability credentials, even if this means reducing overall leased footprints (CBRE, 2023; Knight Frank, 2024). Bangkok’s market is reflecting this global shift, with new supply in the CBD designed to meet these evolving needs, while older buildings face mounting pressure to modernize or risk obsolescence.

2. Demand Drivers & Hybrid Work Trends

The post-pandemic era has cemented hybrid work as a long-term reality. Studies such as the Global Survey of Working Arrangements (Barrero et al., 2023) indicate that remote work accounts for around one-fifth of total working days in advanced economies — a fourfold increase from pre-pandemic levels. This has decoupled office space requirements from total employee numbers and reduced peak daily occupancy levels.

In Bangkok, this has translated into a “flight to quality,” where tenants are consolidating into smaller but higher-quality spaces in well-connected CBD locations. Multinational firms in finance, technology, and professional services have shown a preference for buildings with strong amenities, advanced building systems, and sustainability certifications (JLL, 2024).

The literature underscores that hybrid work does not necessarily diminish total office demand, but it reshapes it: competitive assets capture a disproportionate share of leasing activity, while under-invested buildings see extended vacancies (OECD, 2023).

3. Quality, Health, and Productivity in Office Buildings

The relationship between indoor environmental quality (IEQ) and human performance is well-established in academic literature. The COGfx studies by Harvard’s T.H. Chan School of Public Health (Allen et al., 2016) demonstrated that higher ventilation rates, lower CO₂ levels, and reduced exposure to volatile organic compounds can significantly improve cognitive function and decision-making.

Health-focused building standards such as WELL and Fitwel, alongside the Thai Green Building Institute’s criteria, are increasingly influencing tenant decision-making in Bangkok. Asia-Pacific market research indicates that tenants are willing to pay a rental premium for certified healthy buildings, often citing benefits in talent attraction, employee satisfaction, and productivity (World Green Building Council, 2020).

Recent Bangkok Grade A projects have integrated advanced HVAC filtration, real-time IAQ monitoring, and biophilic design — features that literature now treats as baseline expectations for competitive office space.

4. Sustainability: Green Premium and Brown Discount

The concept of the “green premium” — higher rents and asset values for environmentally certified properties — is widely supported in the literature (Eichholtz et al., 2010; Fuerst & McAllister, 2011). In Bangkok, LEED, WELL, and TGBI-certified offices have been observed to achieve mid-to-high single-digit percentage rent premiums compared to similar non-certified stock, alongside stronger occupancy resilience.

Conversely, the “brown discount” — the loss of value for non-compliant, inefficient buildings — is becoming more evident. Studies show that such assets face accelerated obsolescence, rising vacancy, and higher capital expenditure requirements (Chegut et al., 2014).

Regulatory drivers in Thailand include the Energy Conservation Promotion Act’s energy performance requirements for designated buildings, evolving Bangkok Metropolitan Administration climate policies, and the emerging Thailand Green Taxonomy, which is expected to influence lending criteria and investment flows.

5. Flexible Office Space & Evolving Lease Structures

Flexible workspace has transitioned from a niche offering to a strategic portfolio tool for occupiers. Literature on workplace agility shows that a “core and flex” model — combining a long-term headquarters lease with on-demand space — allows corporations to manage volatility and scale efficiently (Harris, 2021).

In Bangkok, flexible workspace is concentrated in Grade A CBD buildings near BTS and MRT stations, with both global and local operators active in the market. Tenant demand is driven by hybrid work models, project-based teams, and cost flexibility.

Although Thailand’s legal framework still favors traditional fixed-term leases, some landlords are adopting managed office models, fitted suites, and shorter lease commitments to meet changing tenant preferences. Literature suggests these adaptations can enhance tenant retention in competitive supply environments.

6. Capital Values, Investment Flows, and Market Bifurcation

Globally, prime ESG-compliant offices continue to attract institutional capital, while secondary assets face pricing pressure and reduced liquidity (PwC & ULI, 2024). Bangkok mirrors this pattern: prime CBD buildings with strong sustainability credentials have maintained stable yields, while older, non-compliant assets have seen yield softening and longer marketing periods.

The Bank of Thailand’s lending environment, combined with a gradual shift towards sustainability-linked financing, is expected to reinforce the capital preference for high-quality, green-certified assets. This is consistent with findings that green buildings may secure better debt terms in markets with mature ESG finance frameworks (WGBC, 2021).

7. Retrofit Economics & Decarbonization

Retrofit literature in tropical climates highlights cooling system optimization, lighting upgrades, and smart controls as the most cost-effective interventions (IEA, 2022). Bangkok case studies show that deep retrofits can achieve 20–30% reductions in energy consumption, with payback periods under seven years when integrated into planned maintenance cycles.

Thailand’s Energy Conservation Promotion Act mandates energy management programs for large buildings, which supports the adoption of retrofit strategies. The Thai Green Building Institute now includes operational carbon considerations in its certification frameworks, aligning with the country’s net-zero 2050 pledge.

Retrofits are no longer framed purely as operational cost-saving measures but as value protection strategies, safeguarding liquidity and market relevance in an ESG-driven investment climate.

8. Strategic Implications for Bangkok Owners/Operators

The synthesis of literature and market evidence suggests four strategic priorities:

1. Invest in Prime, ESG-Compliant Assets – Prioritize capital deployment toward buildings with strong location, design, and sustainability credentials.

2. Enhance Tenant Experience – Focus on IAQ, amenities, and service quality to improve retention.

3. Adopt Flexible Leasing Models – Integrate core and flex options to match hybrid-driven demand.

4. Plan and Execute Retrofit Pathways – Develop multi-year capex roadmaps tied to regulatory milestones and tenant ESG commitments.

9. Evidence Gaps & Research Needs

Despite robust global literature, Bangkok-specific evidence remains limited in several areas:

• Longitudinal data on occupancy/utilization in hybrid work contexts.

• Empirical measurement of green and health certification premiums controlling for location and age.

• Detailed ROI studies for retrofits under Thai energy pricing and financing conditions.

• Feasibility analysis of office-to-residential/hospitality conversions in Bangkok.

10. Conclusion

The Bangkok office market is at a critical inflection point. Hybrid work, ESG imperatives, and asset bifurcation are reshaping demand and investment priorities. The literature consistently shows that future competitiveness will depend on delivering high-quality, healthy, flexible, and low-carbon space.

Owners and investors who act decisively — aligning portfolios with tenant ESG goals, embracing hybrid design principles, and executing targeted retrofits — will be best positioned to secure long-term market relevance and capital flows. Those who delay risk being left with stranded, illiquid assets in an increasingly unforgiving market.

References

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