Golden Ventures Leasehold Real Estate Investment Trust (GVREIT) will invest 200 million baht in the renovation of two office buildings in order to enhance their competitiveness and retain tenants amid a surge in office supply.

Withawat Koottatep, first executive vice-president of commercial development, commercial business at SET-listed developer Frasers Property (Thailand) (FPT), which manages GVREIT, said that while office demand remains strong, the influx of new supply is significant.

"Demand for office space in the central business district [CBD] is being driven by emerging sectors such as electric vehicles, pharmaceuticals and tech firms, although some industries such as ICE [internal combustion engine] cars and beauty products are downsizing," he said.

According to property consultants JLL Thailand and CBRE Thailand, office supply in Bangkok tallied around 9.61 million square metres, as of the first quarter of 2024.

The occupancy rate during this period was 82.2%, down 2.3% year-on-year, and 1.3% down quarter-on-quarter.

The average rents for Grades A+, A and B offices in the CBD were 1,125 baht, 915 baht and 721 baht per sq m per month, respectively.

Over the next three years, at least 1.6 million sq m of office space will be completed.

This includes the office space in the super-luxury mixed-use project One Bangkok, developed by Fraser Property Limited, whose major shareholder is also a key stakeholder in FPT.

"As one of the largest office landlords in the CBD, we need to upgrade our old assets to stay competitive," Mr Withawat said.

The two office buildings owned by GVREIT which will be renovated and upgraded are Sathorn Square on Sathon Road and Park Ventures on Phloenchit Road. Both are 14 years old and are the oldest assets of GVREIT.

At present, Sathorn Square has an occupancy rate of 90%, while that of Park Ventures is 95%.

The renovation budget of 200 million baht would break even in seven years, with the primary goal of retaining existing tenants.

The upgrade will include technology to enhance safety and convenience, energy-efficient management systems, features to promote the health and well-being of tenants and occupants, improve workplace experiences and refresh design elements.

FPT on Tuesday reported 339 million baht net profit in the second quarter of 2024, up from 169 million baht in the same period of last year, on revenue of 3.8 billion baht, increasing 9%.

Of the amount, 2.73 billion baht was from residential development business, 769 million baht from industrial and commercial properties, and 327 million baht from other sources.