Thailand’s commercial real estate sector, especially the office segment, is expected to encounter a substantial oversupply in 2025-2026. New office developments are projected to grow annually by 2.5% to 4.5%, significantly outpacing the sluggish demand growth of around 1% or less. This imbalance is attributed to weak economic performance, the ongoing prevalence of hybrid work arrangements, and declining employment levels, which are likely to reduce office occupancy rates from 81% in 2024.
This oversupply situation will intensify competition among developers, pushing them to differentiate their projects, enhance operational efficiency, and emphasize sustainability to attract tenants.
The SCB Economic Intelligence Center (EIC) has released its forecast for Thailand’s commercial real estate market for the latter half of 2025 through 2026, emphasizing that the sector remains under pressure due to excessive supply, particularly in office rentals.
According to the report, demand for office space is expected to grow only 1% year-on-year in 2025, maintaining a similar pace to the previous year, and is projected to remain stagnant into 2026. The outlook is hindered by Thailand’s sluggish economic growth, incomplete recovery of investor confidence, fewer new business registrations, declining employment, and global uncertainties such as trade tensions.
While foreign direct investment provides some support, as reflected by high Board of Investment (BOI) applications in the first half of 2025, overall demand remains limited. The continuation of hybrid working arrangements post-COVID-19 has also lessened the need for physical office space.
Meanwhile, new office supply under construction is contributing to the market expansion, with projected annual growth of 2.5%–4.5%. This higher supply outlook is expected to cause occupancy rates to fall from 81% in 2024, especially in Grade A and A+ segments. Rental growth is anticipated to stay constrained due to weak demand.
Regarding retail property, SCB EIC forecasts modest annual growth of 1%–2% in rental rates for 2025–2026. Domestic purchasing power remains fragile amid high household debt and slow economic expansion, compounded by reduced tourist arrivals—particularly from China—which has diminished mall and retail traffic.
Despite these challenges, leading developers continue to draw strong visitor numbers through strategic location diversification, renovation efforts, and a broader tenant mix. New retail developments are expected to increase by 3%–4% annually, which could lead to a slight dip in occupancy rates from 95% in 2024, although rates are likely to stay above 90%. Rental increases are projected to be modest, at only 1%–2% annually.