asia pacific market briefs

8/2/2019 Asia Pacific Market Briefs

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ASIA PACIFICMARKETBRIEFSA CushmAn & WAkefield ReseARCh PubliCAtion

mAY 2011An oVeRVieW of the AsiA PACifiC offiCe mARket


2/8

1

ASIA PACIFIC MARKETBRIEFS

It is expected that the area will become more populated aterthe completion o residential and retail projects in the next ewquarters.

PERTHAter staying in the negative territory orthree years, absorption in Perth pickedup in 2010. Currently, the vacancy rate isat 9.5%. Another 1.5 million square eet(ms) is expected or delivery in 2011and 2012. I the past average absorption

o about 0.7 ms per year is continued, vacancy rate may stabilize.Te sales environment seems dicult with no sales aboveAUD$45 million and ew transactions in the AUD$8-AUD$30million range in the past six months.

SYDNEYSydney rebounded this quarter onan 8.2% vacancy actor, a positiveresult ater two and a hal years oincreasing vacancy. As the economicoutlook is positive, it is expected thatleasing activity will increase especially

or companies looking to hire more sta and expand to largerpremises. With ew construction projects in the pipeline, vacancyrate is likely to continue to all.

CHINA

CHENGDUTere is strong leasing interest inChengdus market largely due to new andurnished completions o Grade A ocebuildings. Rental rates have increased andvacancies have declined. Despite positiveabsorption this quarter, with more new

supply (about 21.85 ms) coming on stream, it is expected thatthe vacancy rate will rise and rental rates will decline slightly.

BEIJINGIncreased tenant demand caused rentsto rise signicantly by 10% comparedto the previous quarter. Tis uptrendis expected to continue, especially withlow supply in core markets through2012. Tere is 15ms o supply in the

pipeline. O that total, 5.5 ms will be delivered in 2011 and 0.4ms is already pre-leased. Domestic tenants are accounting ora larger share o the absorption and they have been competingwith MNCs or space regardless o higher rents. Te tight marketin CBD area may result in tenants looking or alternatives indowntown submarkets where choices are abundant and rentalsmore avourable.

REGIONAL

APACTe Asia Pacic region continuedto grow amid an uncertain global

environment. At the same time, dueto ast growth coupled with improvedlabour market conditions and risingoil prices, infation has become a main

concern or many countries across the region. Nevertheless,improved economic conditions have translated to risingoccupancies in many oce markets in the region. Higher rentsare observed, with notable increases in Beijing, Hong Kong andSingapore. Investment activity, however, has eased comparedto the same period last year. Overall, the economic outlookremains positive, albeit expansion will be slower than in 2010.Occupancies and rents this year and next are expected to remain

high.

SELECT COUNTRIES

AUSTRALIA

BRISBANEVacancy rate is still high at 9.4% andBrisbane struggled with an oversupplyo inventory accumulated over thepast two years. wo natural disasters,a food and a cyclone, also aected theoverall economy. However, two large

sales closed at the end o 2010 provided a much-needed boost

to the oce market in Brisbane. Tere are new projects beingannounced and tenants may be seeking opportunities to upgradeto newer acilities thus creating some pick up in the absorption.

CANBERRACanberra recorded a vacancy rate o13.4%. Tere is continuous supply inthe coming years until till 2013 and thevacancy level is expected to remain high.Tus, some tenants may be lookinginto relocation and upgrading to newer

premises. Nevertheless, absorption is likely to continue at average

levels i there are no changes in Government policies; the maincatalyst or absorption perormance in Canberra.

MELBOURNECompared to the previous quarterwhere there were a couple o largesales or more than AUD$100 millionand many in the AUD$25-AUD$100million range, Melbourne witnessedewer sale transactions this quarter.

With a wide variety o sectors contributing to the oce market,Melbournes vacancy continued to decline rom 6.7% to 6.3%

this quarter. Consequently, eective rents remained high and aregradually increasing. O the new construction in the pipeline,almost hal is located in the up and coming Docklands precinct.

Note: (1) All vacancy and rent changes are quarter-on-quarter basis

Y--Y cag 12-

Vacacy+1.2%

R+3.6% Vacacy

+3.9%R-3.1%

Y--Y cag 12-

Y--Y cag 12-

Vacacy-17.3%R

+3.6%

Y--Y cag 12-

Vacacy

+4.8%R0.0%

Y--Y cag 12-

Vacacy-6.1%R+17.5%

Vacacy-3.6%R

-4.0%

Y--Y cag 12-

Vacacy+24.0%

R+18.0%

Y--Y cag 12-

Vacacy-62.5%R

+31.9%

Y--Y cag 12-


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SHANGHAIenant activity is buoyant in Shanghai.Although a huge amounto new supply was added to the marketthis quarter, vacancy rose only slightly rom6.1% in Q4 2010 to 6.9% this quarter.Average net eective rents have also risen.

Both domestic and oreign companies have also been actively takingup space, with omson group purchasing one foor in Shanghai WorldFinancial Center and another domestic company buying up two foors.Going orward, occupier demand is set to strengthen urther, withrental rates poised or more growth.

HONG KONGTe oce market in Hong Kong remainedred-hot; with low vacancy rate and high

rentals. Tis is largely due to strong demandrom corporate organic growth and newset-ups. Coupled with limited supply atonly 0.7ms over the next three years, the

rental growth is expected to be around 25-30% this year. Facing atight market, tenants have started looking at other alternatives such asmoving back-oce departments to lower-rent locations and increasingthe seating density. Positive investor interest is also sustained with totalsales transactions risen by 6.5% quarter-on-quarter at over 1,000 deals.

INDONESIA

JAKARTA

Leasing activity in the rst quarter increased,due to rms expanding and the need toupgrade existing premises. On the back oan improved economy and positive outlook,this trend is set to continue. Higher take-upwill help to absorb the new supply o about

4.1 ms due or delivery in 2011. Rental rates are projected to remainstable.

INDIA

AHMEDABADAhmedabad has seen buoyant demand

or oce space. Rentals are on the riseand positive absorption is expected. Whiletelecom and banking sectors remainedthe main drivers, there are gradually moreenquiries rom other sectors such as I and

auto ancillary sector. Vacancy level stands at about 8 -9%.

BANGALORE

Persistent demand coupled withconservative supply resulted in rentals onthe uptrend or Bangalore. O the 6.5 msadditional supply on stream in 2011, 35%is already pre-committed. With positiveabsorption expected or the balance o the

year, the vacancy rate is expected to decline.

CHENNAIRentals remain relatively stable drivenby local demand and lower supply thisquarter. Te upcoming supply would beabout 5.73 ms, with more distribution innon CBD locations. Te lesser supply inthe CBD location may exert pressure on

rentals. Rental escalation is also expected in non CBD locations dueto perpetuating demand.

HYDERABADWith better overall economy, there wasincreased demand or space especially romthe I/Ies sector looking at expansionand accommodating headcount growth.Although 2.1 ms was added to the market

this quarter, majority o the space wasalready pre-committed. With buoyant demand and limited Grade Aspace, landlords and developers have started to revise their rates andit is anticipated that rentals would be on the uptrend.

KOLKATA

Te Kolkata oce market saw in general,appreciation in rental values o allsubmarkets except or Rajarhat whichremained stable due to high vacancylevels. Tis quarter saw 0.9 ms o supplyadded. Over 40% was pre-committed and

the demand came mainly rom the I/Ies sector. Te improvedabsorption will lead to a slight decline in vacancy rates and rentalsare expected to be slightly higher across all submarkets.

MUMBAIWith uncertainty on the transition romSotware echnology Park o India toSpecial Economic Zone, most developersremained cautious and rerained romincreasing rentals. Nevertheless, demandwas broad-based this quarter, with

transactions not only rom I/Ies but also Logistics, Healthcare

and Automobile sectors. Te market will witness a large supply inthe next ew quarters and rentals are expected to remain stable.

NCR

Rentals appreciated across most othe submarkets. Tis quarter saw newcompletions o 1.05 ms. About 4.7 msis expected in the next two quarters andvacancy rates might be marginally higher.In spite o the high level o vacancy and

massive under development projects in the pipeline, Gurgaon

continues to record rental appreciation as evident or the largestshare o demand during the quarter.

Vacacy

0.0%R

+18.3%

Y--Y cag 12-

Vacacy-14.6%

R+3.3%

Y--Y cag 12-

Vacacy+12.5%R+6.1%

Y--Y cag 12-

Vacacy

-11.4%R+5.3%

Y--Y cag 12-

Vacacy+25.0%

R0.0%

Y--Y cag 12-

Vacacy+3.0%R+10.2%

Y--Y cag 12-

Vacacy-42.3%

R-2.1%

Y--Y cag 12-

Vacacy+5.3%

R+12.3%

Y--Y cag 12-

Y--Y cag 12-

Vacacy-28.1%

R+19.2%

Vacacy

-19.6%

R+9.1%

Y--Y cag 12-


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SOUTH KOREA

SEOULOverall vacancy rate in Seoul rose to 7.3%rom 6.7% last quarter and the rate was

more pronounced in CBD where it soaredto 11.9% ollowing the completions oseveral projects. enants with 2010-2011expirations took advantage o this situation

renewing at same rental rates and combined with generous concessionpackages such as rent-ree periods.

TAIWANTAIPEI

Leasing activity was active mainly due tothe expansion o MNCs and new oces setup by Chinese companies. Tere are only a

ew construction deliveries this year and it isexpected to see rents rising and a reductionin vacancy rate. Investor sentiments, however

is marred by the recent hike in interest rate and introduction o Luxuryax Act, reducing prot margin. Tose on the lookout or short-terminvestments have become less active.

THAILANDBANGKOK

Te overall oce market in Bangkokremained steady with rents unchanged andslight increase in vacancy rates. Going orward,

the economy is expecting growth and coupledwith political stability ater the electionsscheduled this year, business sentiments will

improve. Te outlook is promising and positive absorption is expected.

VIETNAM

HANOIHanois Grade A oce space has seen rentsdecreasing while Grade B rents remainedstable. Likewise, vacancy rate or Grade Ahas increased while the rate or Grade Bhas reduced slightly. More projects will becompleted this year and this will urther put a

pressure on the overall vacancy rate. Landlords are expected to oer moreincentives packages and abatements on rents in a bid to retain existingtenants and attract new ones.

HO CHI MINH CITYTere will be signicant constructioncompletions in 2011 and 2012, addingpressure on the vacancy rate. Vacancy standsat 21% or Grade A space and it is likelyto remain elevated over the next ew years.Rentals are observed to be stable with leasing

activity relatively active. Positive absorption is anticipated i the overalleconomy continues to recover and grow.

PUNEWith availability o new Grade A space,Special Economic Zone spaces and lowerrentals at the suburban and peripherallocations, it has attracted some corporaterelocations and expansions. As such, therentals at CBD have decreased by 3%.

Pune is expecting about 5.9 ms o supply this year and rentals arelikely to be stable and increase steadily over the medium term.

JAPAN

TOKYOLeasing activity remained sluggish andstagnant. Vacancy has also been slowlycreeping up. With competition to attracttenants, there is pressure on rents todecline slightly or remain constant, evenor buildings in prime locations. Overall, it

remains a tenants market. While the earthquake and tsunami in March2011 has added to its economic woes, it is not expected to overturn theeconomic situation. Tere will be a temporary slowdown in the next 1-2quarters but with reconstruction activity, the overall economy is expectedto weather the storm and the outlook remains positive.

MALAYSIA

KUALA LUMPURIn view o additional supply into themarket in the next one to two years,rentals are expected to soten. Landlordso older buildings are also using this

opportunity to do reurbishing andalteration works in an attempt to staycompetitive while tenants whose leases are due or expiration wouldbe looking or better deals in newer buildings

PHILIPPINES

MANILALeasing activity in Manila remainedrelatively unchanged. So ar, rents arestable but are expected to pick up,especially with better overall economyand no signicant construction

completions this year. Investor sentimentshave also improved, albeit more cautious in the light o variousmacroeconomic events that have happened

SINGAPORE

Prime oce leasing remained active,albeit at a slower pace compared to 2010.Overall, prime rents have increasedanother 5% rom year end and thus,it remains a landlords market whereoverall availability o prime oce space is

limited. Investor interest was upheld as evidenced by deals closed this

quarter including Capital Square achieving a record selling price o$2,300 per square oot. Te outlook remains positive and rentals areexpected to continue to increase.

Vacacy+31.3%R-18.0%

Y--Y cag 12-

Vacacy0.0%R

+6.0%

Y--Y cag 12-

Vacacy+2.3%

R-1.1%

Y--Y cag 12-

Vacacy+4.5%R-4.6%

Y--Y cag 12-

Vacacy+9.6%R

0.0%

Y--Y cag 12-

Vacacy+25.0%

R

+1.6%

Y--Y cag 12-

Vacacy

+67.4%

R+0.6%

Y--Y cag 12- Vacacy+1.2%

R+7.4%

Y--Y cag 12-

Vacacy

-45.3%R+28.3%

Y--Y cag 12-

Vacacy-9.8%R-0.6%

Y--Y cag 12-


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Table: 1

Table: 2

Table: 3

Table: 4

Source: Cushman & Wakefield Res earch

1Q 2011 siGnifiCAnt neW sAle tRAnsACtions

Cry/Cy bg sar byr sqar fPrca

Prc (usd$)

Japa-ty oac PAl Cya (Cbd) m fa 300,565 876,600,000

sgapr Capa sqar Ra Pac ntuC ic 386,525 705,439,013

sgapr 16 Cyr Qay Ra Pac ntuC ic 279,560 524,516,521

Araa-syy 310-322 P sq CbdCwa Reit/macarrC Prpry

313,865 206,716,849

Araa-syy 55 Carc s Cbdera f maag/ARiA

161,501 86,123,394

1Q 2011 siGnifiCAnt ConstRuCtion ComPletions

Cry/ Cy bg sar majr ta sqar fCp

da

Ca-saga CitiC spyar-Pa i ljaz n/A 2,071,039 1Q11

ia-ma brag-Pa 2 Ar n/A 1,180,000 1Q11

Ca-saga PgA iraa fac Cr ljaz n/A 848,324 1Q11

ia-nCR Asf iga Grga tCs 750,000 1Q11

Ca-Cg sca iv bg nayaxascadvphg

742,709 1Q11

Source: Cushman & Wakefield Rese arch

1Q 2011 siGnifiCAnt PRoJeCts undeR ConstRuCtion

Cry/ Cy bg sar majr ta sqar fCp

da

Japa-ty Pa Cya (Cbd) bag 1,517,711 2Q12

ia-nCR laar Cyr Par Grga n/A 1,500,000 3Q11

Ca-bjg G Cr ea 2 Rg Ra n/A 1,442,363 4Q11

kra-s 101 P Av Cbd n/A 1,399,232 4Q11

sgapr Aa sqar twr 1 mara bay C Grp 1,300,000 2Q11

Cry/Cy bg sar ta sqar f

Ca-Cg sca iv bg nayaxasca vphg C. 355,209

ia - Jaara sra saya iii saya bag 322,917

ia- kaa uc ipac Rajara Cgza 270,000

kra-s Cr 1 Cbdmcy,Rjkra,hawa e&C

261,294

ia-P dlf Ar hjwa Cgza 250,000

Source: Cushman & Wakefield Res earch

1Q 2011 siGnifiCAnt neW leAse tRAnsACtions

Source: Cushman & Wakefield Resear ch


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5


1Q 2011 RentAl RAtes

Source: Cushman & Wakefield Resear ch

Table: 5

loCAl CuRRenCY (p pr )

in usd

(p pryar)

in euRo

(p pryar)

CountRY CitYClAss AGRoss

RentAl RAte

Q--QChAnGein Rent

Y--YChAnGein Rent

ClAss AGRoss

RentAlRAtes

ClAssAGRossRentAlRAtes

Araa bra 4.73 -0.56% 3.65% 55.16 445.21

Araa Carra 3.18 nA nA 37.08 299.03

Araa mr 4.72 0.00% 17.48% 55.02 444.09

Araa syy 6.21 -4.03% -4.03% 72.34 583.88

Araa Pr 4.88 0.00% -3.08% 56.82 458.65

Ca bjg 303.60 10.18% 31.86% 51.61 391.62

Ca Cg 152.30 8.63% 17.97% 25.89 196.45

Ca saga 355.84 3.40% 19.19% 60.49 459.00

Ca hg kg 66.48 8.00% 18.30% 102.41 776.69

ia Aaa 35.00 2.94% 6.06% 9.46 71.37

ia bagar 82.00 2.50% 12.33% 22.16 167.21

ia Ca 60.00 0.00% 9.09% 16.22 122.35

ia hyraa 47.00 0.00% -2.08% 12.70 95.84

ia kaa 108.00 4.85% 10.20% 29.19 220.22

ia ma 300.00 0.00% 0.00% 81.08 611.73

ia nCR 256.00 2.40% 5.35% 69.19 522.01

ia P 58.00 -3.33% 7.41% 15.68 118.27

ia Jaara 187,813.00 1.30% 3.30% 24.05 182.24

Japa ty 20,743.63 -1.67% -4.57% 85.53 640.33

kra s 25,724.49 -1.36% 0.58% 26.17 198.58

maayakaalpr

6.25 0.50% 1.60% 24.74 187.82

Ppp maa 619.91 0.00% 0.00% 16.04 120.84

sgapr sgapr 9.65 6.00% 28.30% 89.76 696.27

taa bag 594.96 -0.32% -1.11% 21.97 166.13

Vah Cm Cy

70,000.00 7.70% -18.00% 40.20 304.57

Va ha 73,220.00 7.00% 6.00% 42.00 318.21


7/8

6


15.0%

12.4%

10.0%

9.4%9.4%

8.1%

5.7%

29.4%25.3%

23.7%21.0%

20.0%19.3%15.8%

15.0%

14.0%

12.0%

9.3%9.2%9.0%

7.7%6.9%

6.3%6.2%

3.5%

Chengdu

Pune

Kolkata

Ho Chi

Mumbai

ChennaiBangalore

Kuala

Hyderabad

Jakarta

NCR

Hanoi

Bangkok

Perth

Manila

Brisbane

Tokyo

Ahmedabad

Sydney

Seoul

Shanghai

Beijing

Melbourne

Hong Kong

Singapore

OVERALL VACANCY

1Q 2011 VACAnCY RAtes

PRoJeCts undeR ConstRuCtion in AsiA PACifiC

ta crc = 229.5 qar

Figure: 1

Figure: 2

Source: Cushman & Wakefield Resea rch

Source: Cushman & Wakefield Resea rch

Australia 2.7%

China 24.8%

India 42.0%

Indonesia 2.1%

Japan 4.9%

Korea 10.1%

Malaysia 4.8%

Phi lippines 1.6%

Singapore 1.8%Thailand 0.5% Vietnam 4.7%


8/8

7


2011Cushman&Wakefield

AllRightsReserved

AUSTRALIA

David Woolford

Managing Director

ea: [email protected]

Ar: lv 1, 60 Carag sr

syy, Araa nsW 2000

612 9223 4888

CHINA

Andy Zhang

Managing Director


Ar: 6f, twr 1, Ca Cra Pac

n. 81 Jag, Cayag drc

bjg, Ca 100025

86 10 5921 0808

HONG KONG

John Siu

Executive Director


Ar: 6 fr, hy bg

5 Q Ra Cra

hg kg, Ca

852 2956 3888

INDIA

Anurag Mathur

Managing Director


Ar: 14 fr, twr C, bg 8dlf Cyr Cy

Grga, ia haryaa-122002

91 124 4695555

INDONESIA

David Cheadle

Managing Director


Ar: Jaara sc excag bg

twr 2, 15 fr

J. J. sra kav. 52-53,

Jaara 12190

62 21 2550 9500

JAPAN

Todd Olson

Executive Managing Director

ea: [email protected]: sa Par twr 13f

2-11-1 nagaac Cya-,

ty, Japa 100-6113

813 3596-7070

MALAYSIA

YY Lau

CEO


Ar: l 3A-1, lv 4, Wa W1m

7 Jaa Aag haj opg

taa t dr ia

kaa lpr, maaya 60000

603 7728 8116

PHILIPPINES

Jose Marie Cuervo

CEO


Ar: 5 f s&l bg

101 ea s. cr. da Ra s. lgap Vag,

maa Cy 1229, Ppp

632 750 6610

SINGAPORE

Toby Dodd

Executive Directorea: [email protected]

Ar: 3 Crc sr

#09-03 sag h,

sgapr 049483

65 6535 3232

SOUTH KOREA

Richard Hwang

Managing Director


Ar: 5/f kra cpr g

21 sgg-g, Jg-g

s, s kra 100-070

822 3188 322

TAIWAN

Michael Tseng

President

ea: [email protected]: RePr iraa ic.

13f-2, n. 89, sgR Ra

excag sqar o

tap, tawa

886 2 2758 6000

THAILAND

Teerawit Limthongsakul

Director

ea: [email protected].

Ar: 31 fi., bag irac

bg / Y.W.C.A.

25 s sar Ra,

tgaa, sarbag 10120, taa

02 286 8899

VIETNAM

Hang Dang

Managing Director


Ar: lv 3, Par bg

52 dg d, drc 1

h C m Cy, Va

84 8 2914 707

Ca & Wa Aa Pacc Rarc Grp z rarc aa ara, ac a rc cra ag cr a acr cc

ar rpr a pca a Aa Pacc rg. trg vry y, accra, g-qay rarc rpr ag r,

ar ar wr a ay, w a a r c ag prpry c a r jcv a ac

r cpv p.

fr a rarc ra qr, pa cacSigrid Zialcita

Managing Director, Research, Asia Pacifc


Ar: 3 Crc sr

#09-03 sag h

sgapr 049483

65 6535 3232

Joanne Lee

Manager, Research, Asia Pacifc


Ar: 3 Crc sr

#09-03 sag h

sgapr 049483

65 6535 3232

asia pacific market briefs

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