Knight Frank launches the Knight Frank Asia-Pacific Prime Office Rental Index for Q1 2014. For the first time, Phnom Penh – Cambodia’s capital city – has been added to the Index, increasing Knight Frank’s coverage to 20 office markets across this region.
Results for Q1 2014:
• Banking and finance industries likely to become more active as Knight Frank Asia-Pacific Prime Office Rental Index climbs 1.3% in the first quarter of 2014, and now sits 3.6% above its pre-crisis (Q2 2008) peak
• Phnom Penh saw the largest increase in prime office rents across the region, with an 18.6% increase in Q1 2014
• Regional financial hubs of Hong Kong, Singapore and Tokyo see prime office rental growth in Q1 2014
• Only 7 of the 20 prime office markets tracked saw prime rents soften in Q1 2014, mostly due to relatively high vacancy rates, providing tenants with options and negotiation power
Nicholas Holt, Head of Research for Asia Pacific at Knight Frank, says, “while 16 of the 20 markets tracked are projected to see rents remain steady or even increase, we note that much will hinge on China’s economy, which poses the most significant downside risk to our forecasts.”
“Hong Kong saw office market activity increases slightly over the quarter, riding on the improved Finance, Insurance & Real Estate (FIRE) sector sentiment and activity boosted by the recently announced partnership between the Hong Kong and Shanghai Stock Exchanges. In Mainland China, the 238,000 sq m of new supply introduced in the quarter pushed down rents in Shanghai, while the economic slowdown continued to weigh on Beijing’s office leasing market,” says David Ji, Head of Research & Consultancy, Greater China at Knight Frank.