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Singapore, Bangalore, Melbourne CBD and Auckland are expected to lead rental recovery, with rents increasing by around 2% to 3% on average per annum in the next four years.
While occupiers in Asia Pacific have targeted higher office density in recent years, such trend can no longer continue with COVID-19, revealed Colliers International in a report.
This comes as most occupiers are expected to adhere to standard social distancing guidelines, keeping a 1.5 metre distance between staff.
Despite this, the traditional Central Business District (CBD) is not expected to lose importance in cities with “dense urban centres and rely on mass public transport, at least after COVID-19 is under control”.
Colliers, however, sees suburban office locations receiving greater interest from now on.
“The office will retain a key role in corporate real estate strategy, but we expect that some firms will shift to a more diverse and employee choice-based real estate strategy,” said Sam Harvey-Jones, Managing Director, Occupier Services, Asia, at Colliers International.
“This may include remote working, flexible workspace and a hub-and-spoke model where the tenant retains its CBD headquarters, perhaps with a reduced footprint, coupled with suburban satellite offices.”
In fact, demand seem to be picking up already in China, while demand is anticipated to “stay firm in Bangalore, the city with APAC’s highest long-run growth prospects and a major technology centre”, said Andrew Haskins, Executive Director, Research, Asia, at Colliers.
He is also optimistic of a medium-term recovery in absorption in Singapore, which is emerging as the most popular tenant location in Asia.
Over in Hong Kong, he expects demand coming from local and mainland Chinese to offset possible lower demand from multinational companies.
Singapore, Bangalore, Melbourne CBD and Auckland are expected to lead rental recovery, with rents increasing by around 2% to 3% on average per annum in the next four years, said Doug Henry, Managing Director, Occupier Services, Australia, at Colliers.
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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg