Knight Frank launches the latest Asia-Pacific Prime Office Rental Index for Q3 2014. The index increased 1.2% in the third quarter of 2014, following a drop in the previous quarter.
Results for Q3 2014
• Prime office rental growth was experienced in nine of the markets tracked, with six rental declines and four markets recording no rental movement.
• Vacancy rates fell or remained steady in 15 of the 19 markets tracked, leading to a 0.2% drop in the regional vacancy rate, which now stands at its lowest level since Q4 2008.
• Tokyo registered the highest rental growth at 6.4% whilst Perth saw the largest decline at -1.3%.
• Tokyo’s Grade-A office market saw the strongest rental growth over the quarter – a trend we expect to continue into 2015, as vacancy rates continue to decline amid buoyant demand.
• Hong Kong saw prime rents slightly increase 1.6% quarter on quarter in Q3 2014, with the opening of the Shanghai-Hong Kong Stock Connect likely to continue to boost mainland Chinese demand.
• This quarter marks the inclusion of Taipei for the first time. Prime rents in Taipei remain fairly flat amid solid office net absorption led by the high-tech and finance sectors.
Nicholas Holt, Head of Research for Asia Pacific at Knight Frank, says, “Tightening vacancy rates across the region are spurring a more widespread rental recovery. Downside risks remain in the region, including the Chinese slowdown, deflation in the EU and the impact of tightening monetary conditions in the US and the UK.”