Office rents generally flat in 1st quarter
By Cherry Cao |
June 4, 2013, Tuesday
|
Print Edition
Print Edition
THE Asia Pacific region generally saw modest office rental growth in the first quarter of this year while capital values remained resilient, according to research by international real estate services provider Jones Lang LaSalle.
In Shanghai, rents were generally flat.
Across the region, leasing activity in the tier-1 office markets was generally subdued in the January-March period on the back of corporate caution. Financial centers remained weak, with some ongoing contraction in Hong Kong and Singapore.
Beijing saw a marked slowdown in take-up as did the Australian markets. In India, slow expansion by multinational companies was partly offset by steady demand from IT and IT enterprise service firms. Steady take-up was recorded in Japan, South Korea and emerging Southeast Asia, with strong underlying demand in Manila and Jakarta constrained by a lack of available space.
As a result, net effective rents were largely flat or grew modestly in most cities during the first three months, with landlords taking a cautious stance on asking rents. Of the 27 featured office markets, 14 saw a quarterly increase in net effective rents, while the rest saw either rents stabilized or registered declines. Aggregate rental growth across the region averaged 0.3 percent quarter-on-quarter, slowing further from 0.4 percent in the last quarter of 2012.
Jakarta continued to lead all with a quarterly rental increase of 7.4 percent due to a lack of quality space, with rental increases of between 1 percent and 4 percent seen in some other emerging Southeast Asian cities such as Kuala Lumpur and Bangkok. In Tokyo, rents edged up by 0.8 percent while in Shanghai and India, they held generally flat.
Average rents rise
Beijing, which saw leasing activity slow markedly, suffered a rental decline of 3.7 percent in the first three months, the largest quarterly retreat across the region. Rents declined further in Hong Kong by 1.3 percent as landlords at the top end of the market remained under pressure. Rents stabilized in Singapore for the first time since the third quarter of 2011 and fell in most Australian cities, with Perth leading all decliners by a drop of 3.3 percent.
Year on year, average rents in aggregate rose 2.2 percent in Asia Pacific, compared with a 6.2 percent growth registered in the previous 12 months.
Jakarta led all gainers with an annual growth of 36 percent, followed by Bangkok and Beijing, which also registered growth of more than 10 percent. Hong Kong and Singapore, however, registered the biggestrental declines of 5-6 percent forthe past 12 months.
Capital values, meanwhile, continued to increase moderately in most markets during the first quarter, although Beijing recorded the first decline, of 5.6 percent quarter-on-quarter, since 2009. Jakarta saw the largest quarterly growth of 9.7 percent, while capital values in Tokyo and Shanghai were mostly flat, largely in tandem with rentals.
In Singapore and Hong Kong, capital values rose further by 1-4 percent and they edged up slightly in most Australian cities. Across the region, average capital values climbed 1.4 percent from the previous quarter, an unchanged pace from the previous three-months period.
Year on year, capital values in aggregate advanced 5.7 percent, decelerating from a 7.9 percent growth recorded in the previous 12 months. Jakarta again saw the largest year-on-year increase of 47 percent.
Over the short term, rental growth should be limited in most markets, while Hong Kong, Beijing and most Australian cities should see moderate declines, Jones Lang LaSalle predicted.
For the full calendar year, single-digit growth is generally expected with rents in Hong Kong, Singapore and Beijing starting to recover in the second half of this year.
Capital values, meanwhile, should slightly outpace rentals in many markets across the region, supported by continued investor interest.
In Shanghai, rents were generally flat.
Across the region, leasing activity in the tier-1 office markets was generally subdued in the January-March period on the back of corporate caution. Financial centers remained weak, with some ongoing contraction in Hong Kong and Singapore.
Beijing saw a marked slowdown in take-up as did the Australian markets. In India, slow expansion by multinational companies was partly offset by steady demand from IT and IT enterprise service firms. Steady take-up was recorded in Japan, South Korea and emerging Southeast Asia, with strong underlying demand in Manila and Jakarta constrained by a lack of available space.
As a result, net effective rents were largely flat or grew modestly in most cities during the first three months, with landlords taking a cautious stance on asking rents. Of the 27 featured office markets, 14 saw a quarterly increase in net effective rents, while the rest saw either rents stabilized or registered declines. Aggregate rental growth across the region averaged 0.3 percent quarter-on-quarter, slowing further from 0.4 percent in the last quarter of 2012.
Jakarta continued to lead all with a quarterly rental increase of 7.4 percent due to a lack of quality space, with rental increases of between 1 percent and 4 percent seen in some other emerging Southeast Asian cities such as Kuala Lumpur and Bangkok. In Tokyo, rents edged up by 0.8 percent while in Shanghai and India, they held generally flat.
Average rents rise
Beijing, which saw leasing activity slow markedly, suffered a rental decline of 3.7 percent in the first three months, the largest quarterly retreat across the region. Rents declined further in Hong Kong by 1.3 percent as landlords at the top end of the market remained under pressure. Rents stabilized in Singapore for the first time since the third quarter of 2011 and fell in most Australian cities, with Perth leading all decliners by a drop of 3.3 percent.
Year on year, average rents in aggregate rose 2.2 percent in Asia Pacific, compared with a 6.2 percent growth registered in the previous 12 months.
Jakarta led all gainers with an annual growth of 36 percent, followed by Bangkok and Beijing, which also registered growth of more than 10 percent. Hong Kong and Singapore, however, registered the biggestrental declines of 5-6 percent forthe past 12 months.
Capital values, meanwhile, continued to increase moderately in most markets during the first quarter, although Beijing recorded the first decline, of 5.6 percent quarter-on-quarter, since 2009. Jakarta saw the largest quarterly growth of 9.7 percent, while capital values in Tokyo and Shanghai were mostly flat, largely in tandem with rentals.
In Singapore and Hong Kong, capital values rose further by 1-4 percent and they edged up slightly in most Australian cities. Across the region, average capital values climbed 1.4 percent from the previous quarter, an unchanged pace from the previous three-months period.
Year on year, capital values in aggregate advanced 5.7 percent, decelerating from a 7.9 percent growth recorded in the previous 12 months. Jakarta again saw the largest year-on-year increase of 47 percent.
Over the short term, rental growth should be limited in most markets, while Hong Kong, Beijing and most Australian cities should see moderate declines, Jones Lang LaSalle predicted.
For the full calendar year, single-digit growth is generally expected with rents in Hong Kong, Singapore and Beijing starting to recover in the second half of this year.
Capital values, meanwhile, should slightly outpace rentals in many markets across the region, supported by continued investor interest.
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