Knight Frank, the independent global property consultancy, today launches the Asia Pacific Prime Office Rental Index for Q1 2016. The index monitors the prime office rents in 19 cities across Asia Pacific, of which 12 cities registered positive rental growth in Q1 2016, up from 8 in the previous quarter.
Results for Q1 2016
- Knight Frank’s Asia Pacific Prime Office Rental Index grew 1.0% in Q1 2016, accelerating from 0.2% in the previous quarter, as the average vacancy fell by 0.2 percentage points.
- Although the Grade-A office supply pipeline is strong in Hong Kong, it is concentrated in decentralised areas. Rents in Central continued to rise as a result of limited available space.
- Domestic leasing demand arrested rental decline in Beijing.
- Tokyo saw the highest rental growth, as the prime vacancy rate remained at a multi-year low.
- Going forward, Knight Frank expects rents in 14 cities to increase or remain steady over the next 12 months.
Nicholas Holt, Head of Research for Asia Pacific, says, “While the macro-economic story across the region remains uncertain, office markets have tended to see rents hold up fairly well over recent months. Despite our longer term forecasts suggesting we are nearer to the top of the rental cycle in many markets, the next 12 months will see further rental growth in the majority of markets tracked as tight supply and steady demand prevails.”
David Ji, Director and Head of Research and Consultancy, Greater China, says, “In Hong Kong, we believe the polarisation in the Grade-A office market will continue. Office rents on Hong Kong Island are expected to increase by 5% this year, given the tight availability and extremely low vacancy. Meanwhile, office rents in decentralised areas will fall by 5%, given the abundant supply in the pipeline.”
Asia Pacific Prime Office Rents
| City |
Submarket(s) |
3-month % change
(Q4 2015-Q1 2016) |
Forecast next 12 months |
| Tokyo* |
Central 3 wards |
3.4% |
Increase |
| Seoul |
CBD, GBD, YBD |
2.6% |
Increase |
| Beijing |
Various |
2.5% |
Decrease |
| Shanghai |
Puxi, Pudong |
2.3% |
Increase |
| Bangkok |
CBD |
2.2% |
Increase |
| Mumbai |
BKC |
1.3% |
Increase |
| Sydney |
CBD |
1.2% |
Increase |
| Hong Kong |
Central |
1.1% |
Increase |
| Bengaluru |
CBD |
0.5% |
Increase |
| Guangzhou |
CBD |
0.3% |
Same |
| Brisbane |
CBD |
0.2% |
Same |
| Phnom Penh |
City Centre |
0.2% |
Same |
| Melbourne |
CBD |
0.0% |
Increase |
| New Delhi |
Connaught Place |
0.0% |
Same |
| Jakarta |
CBD |
0.0% |
Decrease |
| Taipei |
Downtown |
-0.2% |
Increase |
| Kuala Lumpur |
City Centre |
-0.4% |
Decrease |
| Perth |
CBD |
-1.6% |
Decrease |
| Singapore |
Raffles Place, Marina Bay |
-4.4% |
Decrease |
Source: Knight Frank Research / *Sanko Estate