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News Release

Bangkok

Premium Grade developments bring Bangkok office market to the next level


​Generally, office buildings are allocated into certain categories, with Grade A buildings being the top of the line and normally achieving the highest rents. However, there is now much discussion about a new Premium Grade asset class, which is well established in mature markets, globally and regionally and the Bangkok office sector is already shifting toward it, according to international property consultancy JLL.

Not all office buildings are the same, which is why a general classification system exists to categorize them by location, facilities, amenities, and fittings. Re​​al estate consultants and developers use classes to prepare market data and justify the prices of spaces within office buildings.

Logically enough, a grading system exists to determine various office spaces' quality. Equally, this system helps tenants rent an office. It provides a metric that enables tenants to quickly determine their needs and the spaces to match them.

Whilst the classifications can be subjective because many factors go into pricing office space and Premium Grade and Grade A office buildings have many features in common, there is a rigorous criterion used to differentiate the two classes, according to Dexter Norville, a director of property and asset management at JLL. "For example, Premium Grade office buildings generally feature higher technical specifications and levels of finishing, fixtures, and fittings throughout public and common areas such as lobby, rest rooms, lifts, and parking," he says.

"There are also 'intangible' aspects to consider when identifying a Premium Grade asset. One of these is elevated market perception of the property as a blue-chip corporate address that helps make the building highly desirable and command superior rents," he adds.

High quality of property management is another example of intangible criterion used to define a Premium Grade office building. Apart from safety, security, and sustainability, the management sets a strong focus on satisfaction of occupiers within the building by integrating highly activated and curated tenant engagement and experience programs. In fact, occupants of Premium Grade office buildings are viewed as, and increasingly treated as, customers of the building

To deliver a Premium Grade office development, the developer must set a clear objective and involve quality consultants from the beginning at the project development planning stage. These consultants are not limited to architects and engineering firms but also include sustainability and property management experts.

According to Mr. Norville, a handful of office buildings in Bangkok currently fall into the Premium Grade class. "Some examples are Park Ventures, Sathorn Square, AIA Capital Center and AIA Sathorn Tower that make the grade and are attracting high-quality tenants at above average rents," he adds.

Strong success of these buildings has encouraged developers of new office development projects to move toward the Premium Grade class. One Bangkok by TCCA, for instance, is expected to become one of the most well-designed and technically advanced developments in Asia Pacific with all of the components, not only offices, being designed to be Premium Grade assets.

"With most of the newly completed office developments in Bangkok being Grade A buildings, the Grade A quality that is a key selling point today will soon become a norm. As a result, we believe Premium Grade developments will become a more prominent component of Bangkok's skyline in the near future," says Mr. Norville.