SKYY9 Centre, the Bangkok office tower at the centre of a controversy about the investments of the Social Security Office (SSO), represents the second-largest office transaction on record in the capital, according to the property consultancy Colliers Thailand.
The SSO acquired the complex on Asok-Din Daeng Road three years ago for 6.9 billion baht. Based on office building transaction data in Bangkok over the past two decades, this deal was relatively high in value, said Phattarachai Taweewong, research and communication director of Colliers.
“This transaction ranks among the top three, but while the largest and third-largest transactions were both located on Sathon Road in the central business district (CBD), this tower is situated outside the CBD,” he said.
According to the SKYY9 Centre factsheet, the building sits on a 3.48-rai site, with a gross building area of 95,000 square metres and a total lettable office area of about 39,000 sq m.
Mr Phattarachai estimated the land and construction costs for the building on the higher end at 1.3 million baht per square wah for land, and 40,000 baht per square metre for construction.
Based on his rough estimate, the maximum price of the building would not exceed 5 billion baht.
The government this week set up an inquiry panel to investigate allegations by the opposition People’s Party that the SSO vastly overpaid for SKYY9, which it said had an appraisal price of just 3 billion baht.
Last year, the most recent land transaction on Asok-Din Daeng Road, located near SKYY9 Centre, was priced at 800,000 baht per sq wah for a 15-rai plot, according to Colliers Thailand.
The construction costs for Grade A office towers in the area ranged from 30,000 to 35,000 baht per sq m, said Mr Phattarachai.
“In general, companies acquiring an attractive office tower would want a minimum occupancy rate of 70%. A lower occupancy rate than 70% means the price should be very low to be appealing to investors,” he said.
According to a March 11 statement by the SSO, the building currently has an occupancy rate of about 45%, with 25% of the space already occupied and the parties committed to the other 20% expected to move in by the end of the year.
Colliers Thailand reported the combined value of office tower transactions in Bangkok from 2005-24 was 78.4 billion baht for 40 towers, with a total lettable area of about 1.3 million sq m.
Of this space, 56.8% is located in the CBD, totalling 721,026 sq m, with the majority in the Sukhumvit, Silom and Sathon areas.
Transactions in non-CBD areas were predominantly concentrated on Ratchadaphisek, Vibhavadi Rangsit and Bang Na roads.
The largest transaction was a 15-billion-baht deal in 2017 for an office tower on Sathon Road, where the family-owned landlord sold the property to its own company, with the goal of listing that company on the Stock Exchange of Thailand.
This tower was valued highly based on its location on Sathon Road, where land appraisal prices from 2016-19 were 450,000 to 750,000 baht per sq wah.
The property boasts a large gross building area of 300,000 sq m and total lettable office space of more than 142,000 sq m.