Investigation Launched Into B7 Billion Property Deal by Social Security Office
The SKYY9 Centre, a prominent office tower in Bangkok, is at the center of rising questions regarding the investment practices of the Social Security Office (SSO). This deal marks the second-largest office transaction ever recorded in the city, according to local property analysts.
Three years ago, the SSO purchased the SKYY9 Centre on Asok-Din Daeng Road for 6.9 billion baht, a transaction deemed significant in value when compared to other office sales in Bangkok over the last two decades.
Real estate analyst estimates indicate that while this transaction is among the top three high-value office deals, both the largest and the third-largest occurred on Sathon Road, located within the central business district (CBD). In contrast, SKYY9 is positioned outside of this key area.
The SKYY9 Centre occupies a 3.48-rai plot, featuring a gross building area of 95,000 square meters, out of which approximately 39,000 square meters is available for leasing.
Experts have projected the land and construction costs for the building to be around 1.3 million baht per square wah for land and approximately 40,000 baht per square meter for construction. Based on these estimates, the actual market value of the property should not exceed 5 billion baht.
This week, the government established an inquiry panel to address claims from the opposition that the SSO may have significantly overpaid for SKYY9, which the opposition asserts is valued at just 3 billion baht.
Recent data reveals that last year, a land transaction adjacent to SKYY9 on Asok-Din Daeng Road was assessed at 800,000 baht per square wah for a 15-rai plot.
Construction costs for Grade A office towers in this region typically range between 30,000 to 35,000 baht per square meter, according to market analysts.
Experts recommend that companies investing in attractive office towers should aim for a minimum occupancy rate of 70%. An occupancy rate below this threshold may require significantly lower pricing to attract investors.
According to a statement from the SSO, the SKYY9 Centre currently has an occupancy rate of approximately 45%, with 25% of the office space already leased and commitments for an additional 20% expected to take occupancy by the end of the year.
Analysis shows that the total value of office tower transactions in Bangkok between 2005 and 2024 totals 78.4 billion baht, covering 40 towers with a combined lettable area of about 1.3 million square meters. Notably, 56.8% of this space is located in the CBD, primarily in the Sukhumvit, Silom, and Sathon neighborhoods.
Office transactions in non-CBD locations have been largely concentrated in areas like Ratchadaphisek, Vibhavadi Rangsit, and Bang Na roads.
The largest recorded office transaction took place in 2017, where a 15-billion-baht deal for an office tower on Sathon Road highlighted the premium valuation associated with its prestigious location, where land appraisal prices ranged from 450,000 to 750,000 baht per square wah during 2016-2019.
This particular property features an expansive gross building area of 300,000 square meters and over 142,000 square meters of leasable office space.
