HONG KONG, Dec. 20, 2012 /PRNewswire/ -- Cushman & Wakefield, the world's largest privately owned real estate services firm, announced the Asia Pacific Office Market Forecast for 2013 report, showing that office demand and occupancy in Asia Pacific will remain intact in 2013, despite the region starting to ease its rapid growth.
Sigrid Zialcita, Asia Pacific Managing Director for Research, comments, "The dearth of new supply will sustain tight occupancies in Brisbane, Manila and Perth while the completion of several new projects in some China and Australia cities will provide occupiers seeking top-tier space a chance to expand. Meanwhile, China and India continue to be hotbeds of construction, accounting for over 70% of the millions of square feet expected to be delivered in the region through 2013."
Barring any shock, the economy should generate enough momentum to push absorption gains and in turn, support high occupancies in most markets. However, the occupancy picture plays out differently for each market, depending on supply conditions. China and India remain the hotbed of activity, totaling 144 million square feet slated to be completed through 2014. A supply build up should provide occupiers ample opportunities particularly in Kuala Lumpur, Guangzhou, Pune, NCR, Ahmedabad, Kolkata, Chengdu, Hanoi and Ho Chi Minh, where vacancies are set to settle at 20% or higher through 2014.
Strong occupancies will generally support higher rents in most markets through 2013 and well into 2014. On average, rents are expected to grow at or slightly above the rate of inflation in most markets. Nonetheless, occupiers with three-year leases will, by and large, face higher renewal rates, as Grade A rents across the region will be up by an average of nearly 15% from 2010.
In Hong Kong, a dichotomy formed in the office leasing market as 2012 progressed, whereas moderate to healthy leasing demand and stable to rising rents has occurred in districts outside of Greater Central. Meanwhile, Greater Central has been plagued by weakened demand and declining rents. The Office investment market has performed strongly since Q1 2012; keen demand among investors has underpinned price/capital value appreciation across all markets.
Though growth has slowed, and there are still some global risks, the regional economy is expected to provide a solid backdrop through 2014 that will support a still-healthy demand for office space, and translate to high occupancies, rent growth and in turn values, boding well for most markets in the region.
Richard Middleton, Executive Managing Director of Corporate Investor & Occupier Services for Cushman & Wakefield in Asia Pacific, comments, "Although rental growth is slowing, tenants are still going to see very significant increases in their occupancy costs at their next reversion in most markets in the region. We expect tenants to drive alternative workplace strategies more aggressively into their occupancy planning in an effort to minimize these increases."
About Cushman & Wakefield
Cushman & Wakefield is the world's largest privately-held commercial real estate services firm. The company advises and represents clients on all aspects of property occupancy and investment, and has established a preeminent position in the world's major markets, as evidenced by its frequent involvement in many of the most significant property leases, sales and assignments. Founded in 1917, it has 253 offices in 60 countries and more than 14,000 employees. It offers a complete range of services for all property types, fully-integrated on a global basis, including leasing, sales and acquisitions, debt and equity financing, investment banking, corporate services, property management, facilities management, project management, consulting and appraisal. The firm has more than $5.5 billion in assets under management. A recognized leader in local and global real estate research, the firm publishes its market information and studies online at www.cushmanwakefield.com/knowledge. In China, Cushman & Wakefield maintains six market-leading offices in Beijing, Shanghai, Chengdu, Guangzhou, Shenzhen and Hong Kong. More information is available at www.cushmanwakefield.com.
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