ASIA PACIFIC SEES SUSTAINED DEMAND GROWTH FOR PREMIUM OFFICE SPACE

ASIA PACIFIC SEES SUSTAINED DEMAND GROWTH FOR PREMIUM OFFICE SPACEwith leading cities in China registering strongest rental growth Demand for prime office space in Asia Pacific continued to grow in the second quarter with corporates remaining focused on expanding in the key Greater China markets. The CB Richard Ellis Asia Pacific Office Rent Index rose 3.7% q-o-q in the second quarter thanks to robust occupier demand. Rental growth slowed in a number of Asian markets but falling vacancy in Australia provided rents with a significant boost. Greater China continued to enjoy the strongest growth in the region with rental increases in Beijing and Guangzhou exceeding expectations. Rental growth remained at its strongest in Greater China on the back of strong expansionary demand. Beijing and Guangzhou recorded brisk growth of 20% q-o-q and 10% q-o-q respectively as tenants competed to secure quality space in prestigious locations at above-market rents. Growth in Shanghai and Singapore stabilised due to supply pressures whilst Hong Kong also saw rental growth decline as tenants turned more resistant to paying high rents demanded by landlords. The growth of expansionary demand in Hong Kong and Singapore declines as the period of rapid take up of prime office space witnessed since last year comes to an end. Bangkok turned more active in the second quarter with clearer signs of expansion from existing tenants. Prime rents remained unchanged, but some landlords turned more flexible as competition for tenants is set to intensify with the launch of two buildings in the second half of this year including Park ventures and Sathorn Square. Average grade A rent in Central Business District (CBD) was stable at THB 680 / sq.m. / month while the average grade B rent in CBD stood at THB 467 / sq.m. / month. Oversupply continued to restrain rental growth in Hanoi, Mumbai, Seoul and Kuala Lumpur despite signs of a recovery in demand. Prime rents in Tokyo fell by 1.3% q-o-q as landlords compromised on pricing following the quake and tsunami. The Tokyo office market shows signs of stabilising in May with occupiers displaying a distinct preference for Grade A buildings with disaster prevention features. In the Pacific, although an increase in demand and enquiry levels reduced the level of incentives being offered, prime rental growth continued to be driven by the local development supply pipeline. The newly completed One Bligh Street raised the rental threshold in Sydney while the lack of supply drove rents in Melbourne. Vacancy rates generally declined in most cities across the region during the second quarter. There were a few exceptions, however, with Shanghai, Guangzhou and Mumbai recording a rise in vacancy following the addition of a large amount of new space during the quarter. The rate of decline in Beijing was faster than had been anticipated as demand strengthened and the supply pipeline remained tight. Asia’s substantial development pipeline continues to contrast with the lean supply outlook in the Pacific although both regions expect the impending completion of new trophy buildings to result in further flight-to-quality activity. In Australia the focus is on whether the pending influx of backfill space over the next five years will be absorbed, whilst in Greater China the situation is more optimistic as potential secondary space has already been under active negotiation. Business confidence in the region remains largely positive and companies continue to take on new staff. Mr. Nick Axford, Executive Director and Head of CBRE Research, Asia Pacific said, “Sustained economic growth through the second half of 2011 and into 2012 is expected to drive rents in the short term in Asia. Flatter rental growth and the release of a large quantum of new space in multiple cities means tenants will enjoy more options and be in a stronger position to negotiate, factors which should result in the brisk absorption of office space in the months ahead. China and India are likely to continue to see the strongest expansionary demand, which will be seen across multiple sectors.” However, the outlook for the regional economy continues to be overshadowed by the deteriorating economic situation in the United States and the Eurozone. Whilst economists expect Asia Pacific to record more rapid economic growth in 2012, this will be largely dependent on the revival of activity in regional laggards such as Japan and New Zealand. Major export-oriented and resources-led economies may be more vulnerable to the future weakening of global demand, should such a scenario occur. Click for photo release at www.thaipr.net

• ข่าวCB Richard Ellis
• ข่าวo:con
• ข่าวo:eco
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