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Local and regional firms are expected to emerge as the main players for Asia Pacific’s office leasing market in 2015 as they expand rapidly into core central business districts and outside their home markets.
“We are seeing a trend where domestic and Asian-based firms are now establishing a presence as tenants in core areas, replacing many multinationals which have relocated to more cost effective locations,” said CBRE’s Manish Kashyap, in media reports.
Local and regional firms, especially those involved in the technology sector, are expected to drive office demand in the region, especially in Singapore, China, India, Taipei, Tokyo, Sydney and Melbourne.
In contrast to the upbeat leasing demand from other Asian firms, the leasing appetite of financial institutions are likely to remain mixed as multinational bank continue to downsize.
As for rental growth, office rents for the entire region are expected to rise further thanks to promising prospects in Singapore, Bangalore and Tokyo, but the rate of growth is forecasted to soften to 3.2 percent.
Conversely, Seoul is expected to suffer the highest rental drop of 3.5 percent in 2015, while Brisbane, Guangzhou and Shanghai are expected to post negative growth as well.
As for capital values, it is projected to grow by 3.2 percent this year, down from 3.7 percent in 2014. Singapore, Tokyo, Auckland, Bangalore and Manila are the only countries that will likely see a growth of more than 5 percent.
“Asia Pacific will see solid office leasing momentum in 2015 due to the continued growth in business investment; corporates’ expectations of revenue growth; and the solid job market, with low employment rate in the region ranging from 1 percent to 7 percent,” said Jonathan Hsu, Director of Research for CBRE Asia Pacific markets.
“However, the fragile global economic recovery will ensure occupiers remain in a cost sensitive and risk-averse mode,” he added.
Nikki De Guzman, Editor at CommercialGuru, edited this story. To contact her about this or other stories email nikki@propertyguru.com.sg.
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