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Asia Pacific office rents remain resilient: JLL
May 03, 2012
Office rents in the region increased across 13 markets in Q1 2012, based on figures from Jones Lang LaSalle's (JLL) Asia Pacific Office Index Report. At the same time, 11 markets saw rental declines while three remained static. Overall, a rental growth of 0.2 percent was seen across the region, lower than the 0.9 percent in Q4 2011. Meanwhile, capital values either increased or remained stable. The average quarterly increase stood at 0.8 percent, moderately weaker than the 1.2 percent increase in the previous quarter. "We continue to see a mixed picture across the office leasing markets in Asia Pacific. Whilst continued take-up from domestic companies is driving growth in markets such as Jakarta and across India, we have seen leasing demand slow elsewhere as a result of overall caution amongst corporates, the de-leveraging in the financial sector and slower supply additions in some markets," said Jeremy Sheldon, Head of Asia Pacific Markets at JLL. The strongest rental growth was seen in Beijing and Jakarta, at around 50 percent year-on-year. Similarly, capital values in Jakarta and Beijing saw the largest quarter-on-quarter increases at between four and eight percent, or between 40 percent and 50 percent year-on-year. Dr Jane Murray, Head of Asia Pacific Research at Jones Lang LaSalle, noted that the "continuing global economic uncertainties, particularly in the Eurozone, have impacted corporate hiring and office leasing demand in Asia Pacific in the first few months of 2012." She added that economy in the Asia Pacific region "should still grow significantly faster than the rest of the world this year, although most countries in the region are likely to see a moderate economic slowdown compared to last year." "On the back of a weak business and financial environment, the office market in Singapore continued to face downside pressure especially with the supply overhang, resulting in rising vacancy. We expect prime rents in Raffles Place to ease by 13 percent to 15 percent for the full year," remarked Dr Chua Yang Liang, Head of Research South East Asia at JLL.