Over the next 3 to 6 months, prime workplace market performance in Asia Pacific is most likely to reflect some of the unpredictability surrounding the area's economy, according to the latest index report from Knight Frank.
The index returned to positive growth in the third quarter of 2013, up by 0.5 % following a 0.1 % drop in the previous quarter with Jakarta's premium Grade An office market taping a 28 % boost, the greatest quarterly development on record.
Regardless of this, only 8 of the 19 prime workplace markets tracked saw prime rents increase in the third quarter of 2013 and although rents are expected to remain to rise going forward, the company expects this to moderate due to new supply and a stagnation in the economy.
New Delhi and Bangalore recorded heading rental increases over the quarter, with the latter leading the way with 2.6 % rental development, driven by the IT sector. In Tokyo, prime office rents moderated slightly for the second succeeding quarter, although on an annual basis rents increased 25.2 %. Nevertheless, prime Grade A leases continue to be 40 % below their peak in the first quarter of 2008.
China saw rents decrease marginally, although leads for rental growth have actually increased slightly as the economy grew at its quickest pace this year between July and September. On the other hand, prime office leases fell throughout all significant city CBDs in Australia, as the country's soft economy continues to be affected by the stagnation in the resources sector.
In other places, in South East Asia, Singapore's prime workplace market saw rental growth over the quarter, as leasing activity picked up in the 2nd half of 2013. In Kuala Lumpur, the market stayed flat, with both leas and vacancy rates unchanged. Bangkok's prime workplace rents remained to edge upwards, as the job rate for Grade A structures fell for the sixth succeeding quarter.
'The expectation of tighter monetary conditions are all weighing on development prospects in the region, which in turn are influencing office growths in particular markets,' stated Nicholas Holt, head of research for Asia Pacific.