Demand for office space in the Asia Pacific (APAC) region soared in Q2 2015 with gross and net leasing volumes surging by 41 percent and 76 percent year-on-year respectively, according to the latest JLL report.
India and mainland China were the top performers, with the former contributing 40 percent of the overall regional gross absorption and its volumes nearly doubling from the level seen in Q2 2014. On the other hand, leasing activity was muted in Singapore.
Propelled by the strong appetite for space by technology firms, office leasing volume across the word increased by 8 percent on an annual basis and reached its highest level for more than three years.
Despite this, gross global leasing volume is only expected to increase by only up to 5 percent year-on-year in 2015. Nevertheless, the Asia Pacific’s figure is expected to rise sharply by 15 to 20 percent.
Worldwide vacancy rate also fell to 12.5 percent in the second quarter and would likely decline further, while that in APAC remained unchanged at 10.8 percent.
Moving forward, 14.3 million sq m of new office space are expected to be completed worldwide for the entirety of 2015. Although this is 30 percent higher than last year’s level, this is just slightly above the global average in the past 10 years.
But over the next two years, the global office pipeline is projected to hit 16 million sq m per annum, representing its highest level since 2009.
Across the 98 markets tracked by JLL, prime office rents could increase by 4 percent in 2015, with Hong Kong and Tokyo potentially recording the largest annual rental growth of 10 to 20 percent.
In contrast, prime office rents in Singapore is forecasted to fall by at least 10 percent, according to the report.
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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