As companies extended “work from home” policies and adopted “work from anywhere,” the numbers of empty desks in offices throughout Bangkok has grown. This unused or under-utilized space is difficult to measure, but in the commercial real estate industry this space has an ominous sounding term: “Shadow Space”.

Shadow Space can be thought of as a building’s hidden vacancy rate. Tenants typically cannot sub-let surplus office space without the landlord’s consent and usually cannot return unused space before the end of the lease term, unless they can assign that space to a replacement tenant. So in a very real sense, Shadow Space is also competing with traditional vacant office space for tenants. So how much Shadow Space is out there? The short answer is that nobody really knows.

What we do know is the amount of space that is being returned to landlords is growing, with some tenants reportedly returning 30% -50% of their office space. Whilst the proportion of space returned in the market overall this quarter was a lot lower, it could still leave a significant impact on the market going forward.