Knight Frank today releases the Asia Pacific Prime Office Rental Index for Q2 2015. While a number of markets in the region are plagued by excess supply, sectors empowered by technology, such as online peer-to-peer financial services in Shanghai and e-commerce in India, are driving leasing demand.
Results for Q2 2015:
- The index increased 1.2% in Q2 2015, as the average vacancy rate dropped by 0.1 percentage point.
- 11 out of the 19 markets tracked experienced rental growth, while three registered no movement and five recording rental declines.
- Tokyo saw the highest rental growth in the region whilst Perth continued to be at the bottom of the list since Q1 2015.
- Hong Kong and Taipei continued to enjoy moderate rental growth. Hong Kong leasing demand was generated by Mainland financial institutions, especially fund houses, taking advantages of the Mutual Fund Recognition Scheme implemented in May. While Taiwan was supported by foreign banks and high-technology firms.
- In China, sustained strong supply lifted the vacancy rate and lowered rents in Beijing further. Moving forward, a dearth of new completion in the second half of the year will give landlords a break. The situation in Shanghai is just the opposite. No office space was added in the quarter, boosting the occupancy rate and rents.
- E-commerce is emerging as a major demand driver in India.
- Knight Frank expects rents in 12 markets to either increase or remain steady over the next 12 months.