The Changing Face of the Bangkok Office Market
Even before the advent of covid, the nature of the Bangkok office market was changing.
A combination of more extensive rail links (MRT & BTS) and changes in technology meant that the Bangkok office market was already evolving. There was becoming more emphasis on remote and/or co-working.
In some ways, all the pandemic has done is to bring forward the likely changes. Such changes relate to preferred locations, the design and use of Bangkok office space.
For several years, companies occupying office space in Bangkok have been exploring remote working or work-from-home strategies. Partly this has been to minimise costs. Plus, cope with changing office needs brought about by the behaviour of the millennial generation. The challenges, though, have always been to how best to maximise collaboration and engagement.
The pandemic has been a further catalyst for change in the Bangkok office market
The covid outbreak is acting as a further catalyst for change. Companies are trying to establish a clearer view on whether a more permanent remote working policy is feasible and/or desirable in the long-term.
Whilst it is accepted that change in the Bangkok office market is forthcoming, there are different views on what will be the most productive working environment for modern businesses. In the foreseeable future, however, the end result is likely to be a “hybrid workplace model”. This will combine agile workplaces, with a permanent office complementing work-from-home and co-working spaces. The skill will, of course, be to find the right balance between empowering and monitoring teams.
The pandemic has also caused the delay of several new office developments in Bangkok. Construction activities are being deferred or interrupted. This does, however, give developers the ability to pause for a while and review the future prospects for the Bangkok office market. Perhaps even making changes to planned layouts and configurations of floor plates.
Let’s have a look at 3 of the main areas of potential change. Some of these result from the pandemic. Some from the evolution of changing work practices and infrastructural improvements:
With the continued improvement of the MRT and BTS in Bangkok, whilst location remains important, far better accessibility around the city is a big plus. This means that traditional locations such as Silom, Sathorn, Wireless/Ploenchit and Asoke are still desirable for many local and international companies. Locations such as Rama 9, Ratchadapisek, Vipawadee, and even Mo Chit are continuing to gain in popularity.
Interestingly, despite impending changes into office space usage, it’s unlikely that strategically most major companies will decide to leave the high-density urban cores favoured for their accessibility, amenities and business clustering. There will always be some companies who wish to explore suburban satellite strategies. Yet, this is likely to remain a relatively small percentage of total office users.
One key issue in this regard is the supply, size and availability of office real estate outside traditional CBD’s. In the Bangkok office market, this could be an area of opportunity as the multi-node concept in real estate evolves. Satellite offices and cloud-based platforms as a back-up for head offices are likely to become a greater part of the business continuity plan (BCP) of many companies in the short term. This is to ensure their businesses will still be able to operate if staff cannot access the company’s headquarters.
With regard to this aspect, co-working spaces in peripheral areas will be one of the best choices because a company can rent space on demand when needed.
It may well be that development plans for some new projects will be revised to make them more appealing in the post-pandemic era. Enhancements may include better property management systems; or air filtration systems to combat pollution; plus, well-thought-out BCPs to support tenants.
Flexibility, agility and ability to adapt will be key words in the post-pandemic Bangkok office market. Associated changes in design will aim to increase the efficiency of a workplace. They will also prepare a business for any unforeseen changes that may occur in the future. The goal will be to have activity-based work areas which can be easily reconfigured to support social distancing strategies and split teams within offices, as required.
Ways of working: flexibility is key
Although the physical office will, almost certainly, remain important to most companies, more flexible ways of work will be introduced in the vast majority of companies. A long-term trend will be for employees would be allowed to work outside the office at least part-time.
The workplace is also changing in terms of physical layout. Trends are moving away from dedicated private space and toward shared collaborative space. This is critical for workplace efficiency and satisfying a more hybrid workforce (in-office and remote working). Having said this, some concerns linger due to the uncertainty given the health and safety impact of the pandemic.
A remote vs. hybrid workforce. Remote work is often considered as one extreme with full-time office base the other. In other words, an employee is either full-time remote or full-time in the office. Hybrid, clearly, is a combination of the two styles of working.
Perhaps, not surprisingly, the demand for office space in the high-growth flexible office space market (co-working, serviced office, suites) has slowed due to covid, but also an aggressive over-expansion by some of the so-called “flex providers”. Yet the popularity of such space remains as, for an occupier, there is no capital commitment or risk of being left with unneeded space in an uncertain future. Accordingly, there has been a significant acceleration of the decade-old trend toward greater workplace flexibility.
Indeed, there is a new meaning to “workplace flexibility”. Previously this revolved around flexibility within the physical workplace by providing a greater variety of spaces which employees could use.
With increased workforce mobility, and the move towards a more hybrid way of working, the office design, services provided and supporting technology are also evolving. Therefore, in the future, offices will have to support such mobility.
One of the most popular ways to increase space utilisation and efficiency is by using “free address” or “hot desking”. Staff are not assigned to an individual desk and instead share a network of spaces (offices, workstations, collaboration space, focus rooms and amenities). Occupiers, therefore, can provide fewer desks than people and rebalance their workplaces towards serving a higher number of staff. Implementation of this concept is likely to continue as companies minimise their occupied space to offset overall occupancy costs.
As a result of the pandemic, staff enabled by technology and having enjoyed the experience in working away from the office will have increased expectations for the office spaces they occupy.
Working from home has proven successful but has reduced social interaction, networking, mentoring and collaboration. It can also affect a work/life balance. To maintain career growth prospects and organisational productivity it is important to find the right balance—hence the hybrid style. No doubt, the flexibility to manage work routines between a network of places (including home) will lead the most sought-after employees to be selective about where they work.
The function of the office is likely to move towards being a place for more collaborative, educational and social needs of a growing hybrid workforce. Pre-covid, the workplace was already evolving and seen as a primary facilitator of collaboration, innovation and productivity.
Post-pandemic, the workforce is on an accelerated path of change and office space owners and developers will need to continue to adapt their offerings to compete for the modern type of tenant.