Some markets in Asia Pacific are experiencing growth in non-central business district (CBD) and Grade B office space leases, according to Cushman & Wakefield’s Q2 2018 Asia Pacific Office MarketBeats.
Here’s an overview of the current office landscape in the region in the second quarter.
Australia
Brisbane’s grade-B market experienced positive momentum as tenants gravitated towards high-quality fitted-out space. Tenant demand mainly came from the legal and finance sectors. In Melbourne, prime net effective rents continue to climb, registering at AU$425 per square meters (sqm) as of the end of the second quarter. This represents an increase of 1.7% quarter-on-quarter (QoQ), and 13.3% year-on-year (YoY).
Singapore
Market demand in the central business district (CBD) remained healthy in Q2. The overall Grade A CBD rent rose by 3.8% to S$9.74 per square foot per month (psf/mo) during 2Q2018. Meanwhile in the suburbs, the upcoming integrated development, Paya Lebar Quarter, continued to perform well with Great Eastern and NTUC Income taking up 125,000 sf and 55,000 sf of space respectively.
India
Information Technology – Business Process Management (IT-BPM), BFSI and coworking operators drove leasing momentum in New Delhi-NCR during the second quarter of 2018, contributing 60% to gross absorption. Close to half was recorded in the non-CBD submarket of Gurugram which also noted the maximum number of large sized transactions (above 100,000 square feet). Pre-commitments during the quarter reached 255,000 sf in Gurugram.
South Korea
Office relocations and new acquisitions remained sustained during the quarter. Currently, coworking operators are the most active participants in the CBD market. In Gangnam Business District (GBD), vacancy rate has moved up to 5.8%, up by 0.7% on a quarterly basis after the completion of Luceen Tower (45,847 sqm).
Vietnam
Grade A developments recorded significant rental increases of 4.1% QoQ and 8.0% YoY due to the downgrading of a lower-rent project . Meanwhile, Grade B had modest increases of 0.7% QoQ and 2.5% YoY from projects with better performance.
Philippines
Average asking rents in Metro Manila is still growing, registering a 9.6% increase from PHP802/sqm/mo (US$15.03) in Q2 2017 to PHP879/sqm/mo (US$16.46) for Q2 2018. Among the Metro Manila markets, Pasay City has the biggest YoY growth of 20.8%, followed by Muntinlupa City with 20.2%.
Malaysia
Malaysia’s surprise election outcome in May is expected to create mixed reactions/expectations on how GE14 might change the property landscape. Decisions on consolidation or relocations by office occupiers have been put on hold since early 2018 and this “wait and see” attitude is expected to prevail for the remainder of 2018.
To read the full insights on the region’s office market in the second quarter, visit our MarketBeats portal.
