Turning Office Building Oversupply Crisis into Opportunity, Renovating for the Smart Building Trend

Even though people’s work habits are increasingly shifting to digital, Knight Frank Thailand, a real estate company, reported that there was an addition of 224,600 sq m of office space in 2023, while demand was only 143,000 sq m. This surplus has resulted in market oversupply. Additionally, office space is expected to increase by another 650,000 sq m in 2024.

The oversupply situation has decreased office space rental rates, as demand growth has not kept pace with supply. The competitive intensity forces office building owners to develop their spaces swiftly to address this situation.

The Essential Causes of Oversupply

In 2023, the average office space rental rate dropped to 78%, which is 1.9% lower than the previous year. This is significantly lower than the pre-COVID-19 period when the rental rate was 90%. These figures indicate that people’s behavior has changed, such as

  • Work from Home policy has facilitated employee convenience, leading companies to reduce their leased office space.
  • Sustainability is becoming more important to companies when selecting office buildings. They are looking for facilities that provide various amenities, such as mixed-use buildings that allow residents to live and work in the same area. Moreover, eco-friendly buildings are preferred, which is consistent with ESG principles and helps to reduce carbon footprint.

Office buildings older than 20 years should be renovated to modernize and stay competitive. This includes integrating sustainable strategies to retain current tenants and attract new companies.

The Future Trend of Office Building

Technological advancements and the transition to clean energy are the key factors in elevating building quality, meeting well-being demands, and creating a business betterment.

  1. Technology for convenience and safety, such as IoT systems, allows for convenient and real-time monitoring. This includes AI for processing and monitoring energy management, such as adjusting brightness or temperature, updating parking status, and enhancing user safety through identity verification systems.
  2. Green buildings are environmentally friendly spaces that go beyond relying on energy-saving electrical systems like solar rooftops, district cooling system, or chiller system. They also require water and waste management to help tenants reduce energy costs and pollution emissions.
  3. Sustainable construction is now trending in the construction industry. For instance, pollution-absorbing bricks that filter out dust and improve indoor air quality or self-healing bio-concrete that repair cracks autonomously, ensuring longevity and reducing carbon emissions from the production process.
  4. EV Charging stations in office buildings are part of the transition towards clean energy. Office buildings can support electric vehicle usage by installing EV charging stations. This may evolve into wireless EV charging technology for more convenience and efficiency.

Clean Energy Partner for Net-Zero Building

As an ambition to Net-Zero Solutions Provider, Banpu NEXT offers total Smart Energy Solutions tailored to every business’s needs. These solutions are designed to enhance office buildings’ efficiency, reduce energy costs and carbon emissions.

  1. Solar power generation and energy storage systems are made more efficient with the help of digital platforms that can monitor energy consumption. The battery ensures continuous power supply availability, stabilizes electricity distribution, and improves efficiency.
  2. Chiller system and district cooling system for large buildings distribute chilled water plants to the building’s air conditioning system.
  3. Mobility-as-a-Service (MaaS) provide electric vehicles and charging stations supported by digital platforms for convenient and efficient usage monitoring.

Although competition in the office building market continues to rise, building owners can still renovate their properties to meet consumer demands by opting for smart energy solutions and modern technology. This will elevate their buildings to be sustainable, safe, and adaptable to new working trends, ensuring long-term business competitiveness. For business enterprises are interesting in Banpu NEXT smart energy solutions, please contact us at 02-095-6599 or www.banpunext.co.th