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Singapore and Manila led the rental growth of prime office space in the Asia Pacific region for the whole of 2014 with 15 percent and 23 percent respectively, a report from CBRE revealed.
“Rents in Singapore saw robust growth underpinned by steady demand and vacancy that remained below 5 percent last year. Tightening availability was the main driver for rental growth, with steady demand from e-commerce and technology firms,” said Desmond Sim of CBRE Research for Southeast Asia.
As for Manila, rents rose further thanks to robust demand for office space by Business Process Outsourcing (BPO) companies in what is still an undersupplied market.
Consequently, prime office rents in Singapore hit US$109 (S$147.64) per sq ft per annum, while that in Manila reached US$30 (S$40.63) per sq ft per annum.
Based on CBRE’s rental index, overall office rents in the Asia Pacific region increased by 3.3 percent for 2014 on an annual basis, short of the consultancy’s initial forecast of 4.0 percent.
Looking ahead, rents in Singapore are expected to climb further in H1 2015 due to limited supply of new office space over the next 18 months. However, rental growth could slow in the second half ahead of new supply in 2016.
As for Manila, demand in Makati is spilling over to Global City as no new Grade A supply will be completed in the district until 2016.
“The CBRE Asia Pacific Office Rental Index is projected to increase by 3.2 percent year-on-year in 2015, driven by stronger expansion in Bangalore, Tokyo and Singapore, which will offset weaker growth elsewhere,” it added.
Nikki De Guzman, Editor at CommercialGuru, wrote this story. To contact her about this or other stories email nikki@propertyguru.com.sg.
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