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  • Economic Overview Global growth remained modest during 2Q 2015 due to

    major markets divergent performances. Squarely

    focused on domestic developments, the US economy

    looks to be on firmer ground while the Eurozone seems

    to be rallying by leveraging lower energy costs and

    adhering to quantitative easing measures. That said, a

    stumble in Germanys growth and the ongoing Greek

    Grexit crisis highlights the turnarounds fragility.

    Here in Asia, Chinas central government has cut its

    key lending rate for the fourth time in seven months in

    the face of an economic slowdown while the Japanese

    economy has experienced a modest recovery following

    a slight rebound in consumption.

    Leasing Market The business outlook amongst occupiers in Asias

    main markets currently remains very cautious due to

    the economic outlook and weakening corporate

    performance. As a result, cost control is continuing to

    influence corporate decision-making with many global

    occupiers avoiding ambitious expansion plans and

    emphasizing cost efficiencies and workplace

    enhancements. Of the key business sectors, IT and

    healthcare were the most active in terms of tenant

    groups seeking space to accommodate increasing

    headcounts and new service lines. The banking and

    finance sectors meanwhile are subject to conflicting

    forces. While large multi-national banks are

    implementing significant cost reduction strategies, their

    counterparts in China are actively expanding.

    Overall, average prime office rents in Asia experienced

    a 1.2% quarter-on-quarter (QoQ) increase in 2Q 2015.

    With rental growth of 10.2% QoQ, Jakarta had the

    highest cost increase within the region due in part to

    the growing IT industry. At the other end of the scale,

    new supply of office space in Chengdu have resulted in

    office rents showing a QoQ decline of 3.4%.

    Sales Market Activity across Asia has started to pick up with most

    real estate transactions concentrated on key markets

    such as Shanghai and Sydney due to lower borrowing

    costs and weakening currencies. Shanghai has attracted

    a couple of major office deals during 2Q 2015 and saw

    office real estate investment volume for the quarter

    more than triple to US$1.1 billion. Increasingly active

    in Chinas first-tier cites such as Shanghai, foreign

    Real Estate Investment Trusts (REITs) have added

    stability to the market by becoming long-term players.

    A notable transaction was Mapletrees Greater China

    Trusts RMB1.88 billion (US$303 million) acquisition

    of Sandhill Plaza in Pudong, Shanghai. Elsewhere,

    Sydney is dominating Australias investment volume

    and accounted for around 50% of all volume sourced

    largely via groups from the US and Hong Kong.

    Market Outlook The second half of 2015 is expected to show positive

    economic growth driven by the US economys robust

    recovery, lower oil prices, sustained quantitative easing

    across the Eurozone and Chinas 6-7% economic

    growth. Dampening this growth will be the risk of

    geopolitical turbulence.

    Hong Kong looks likely to witness modest rental

    growth due to limited new office space supply while

    major mainland markets such as Shanghai, Guangzhou

    and Chengdu may experience downward pressures in

    rents following the addition of substantial office space

    throughout the rest of this year. On the sales front,

    yields are likely to compress further during the

    remainder of 2015. This is particularly true in key Asia

    Pacific markets such as Shanghai, Tokyo and Sydney.

    Asia Pacific

    Office Market

    Asia Pacific | Office

    2Q 2015

    http://www.linkedin.com/company/colliers-international?trk=hb_tab_compy_id_5227https://www.facebook.com/colliersglobal?rf=105632526137251https://twitter.com/ColliersIntl

  • Our Presence in Asia Pacific

    1

    Mumbai

    Bengaluru

    Karachi

    Kuala Lumpur

    Singapore

    Ho Chi Minh City

    Yangon

    Chennai

    Wellington

    Auckland Sydney

    Brisbane

    Canberra Perth Adelaide

    Melbourne

    Almaty

    Jakarta

    Delhi NCR

    Manila

    Taipei

    Tokyo

    Beijing

    Hong Kong

    Shanghai Chengdu

    Hanoi

    Bangkok

    Note : Rents, vacancy rate forecasts and new supply forecasts are referring to prime quality office premises in CBD except India.

    In India, rents are referring to prime quality office premises in CBD while new supply and vacancy rate forecasts are referring to the

    prime quality space in the whole city.

    Supply Forecast 2015

    (Million sq ft)

    Legend :

    Supply Forecast 2016

    (Million sq ft)

    Prime Office Rents in CBD, 2Q 2015 (US$ / sq ft / annum)

    Forecast Direction 2015

    Vacancy Rate Forecast 2015

    Forecast Direction 2015

    Forecast Direction 2016

    Forecast Direction 2016

    Astana

    Guang zhou

    Shenzhen

    $52.5

    6.9%

    1.62

    1.51

    $43.1

    10.0%

    0.46

    2.06

    $66.5

    2.0%

    0.00

    0.32

    $33.5

    20.0%

    10.25

    5.15

    $14.1

    43.0%

    0.63

    0.86 $33.0

    15.0%

    8.00

    5.50

    $10.3

    13.0%

    12.98

    7.08

    $93.0

    12.3%

    0.26

    0.59

    $19.6

    52.0%

    10.35

    4.31

    $35.1

    26.0%

    0.54

    0.43

    $9.1

    19.0%

    3.47

    2.90

    $22.2

    12.1%

    2.33

    0.19

    $84.1

    4.6%

    0.53

    3.58

    $41.4

    19.4%

    1.36

    0.33

    $41.4

    10.3%

    6.49

    6.10

    $57.4

    6.8%

    4.67

    3.64

    $53.9

    11.9%

    7.99

    6.59

    $82.2

    6.0%

    5.02

    6.60

    $26.9

    17.0%

    1.82

    0.36 $120.0

    4.8%

    1.33

    1.04

    $29.7

    5.0%

    0.41

    0.52 $25.7

    4.3%

    0.00

    0.00 $44.5

    9.0%

    1.00

    1.50

    $43.9

    13.3%

    0.66

    1.41

    $27.3

    12.5%

    0.21

    0.03

    $40.2

    7.7%

    1.37

    1.04

    $30.3

    9.0%

    0.00

    0.00

    $22.5

    2.0%

    0.00

    0.00

    $25.8

    0.9%

    0.30

    0.52

    $28.2

    17.8%

    4.97

    7.24

    $39.2

    12.9%

    9.70

    26.56

  • Copyright 2015 Colliers International.

    The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to

    ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult

    their professional advisors prior to acting on any of the material contained in this report.

    $2.3 billion in

    annual revenue

    502 offices in

    67 countries on

    6 continents

    United States:

    Canada:

    Latin America:

    Asia:

    ANZ:

    EMEA:

    Authors:

    Simon Lo

    Executive Director | Asia

    +852 2822 0511

    simon.lo@colliers.com

    Jessy Chung

    Assistant Manager

    +852 2822 0643

    jessy.chung@colliers.com

    140

    31

    24

    39

    160

    108

    $1.70 billion square feet

    under management

    16,300 Professional

    and staff

    ASIA

    Mark Lampard

    +65 6531 8601

    mark.lampard@colliers.com

    NORTH ASIA

    Mainland China

    Beijing

    Kelvin Chow

    +86 10 8518 1633 ext.113

    kelvin.chow@colliers.com

    Shanghai

    Michael Wu

    +86 21 6141 3638

    michael.wu@colliers.com

    Guangzhou

    Eric Lam

    +86 20 3819 3988

    eric.lam@colliers.com

    Shenzhen

    Ken Kan

    +86 755 8825 8648

    ken.kan@colliers.com

    Chengdu

    Bonnie Chiu

    +86 28 8658 6288 ext.810

    bonnie.chiu@colliers.com

    Hong Kong, HKSAR

    Hong Kong

    Wendy Lau

    +852 2822 0550

    wendy.lau@colliers.com

    (E-141423)

    Kowloon

    Fiona Ngan

    +852 2117 3301

    fiona.ngan@colliers.com

    (E-197789)

    Japan

    Tokyo

    Katsuji Tokita

    +81 3 5563 2117

    katsuji.tokita@colliers.com

    South Korea

    Seoul

    Jay Yun

    +82 2 6740 2001

    jay.yun@colliers.com

    Taiwan

    Taipei

    Amanda Yang

    +886 2 8101 1120

    amanda.yang@colliers.com

    SOUTH EAST ASIA

    Indonesia

    Jakarta

    Bagus Adikusumo

    +62 21 521 1400 ext.506

    bagus.adikusumo@colliers.com

    Malaysia

    Kuala Lumpur

    Mark Lampard

    +65 6223 2323

    mark.lampard@colliers.com

    *Based in Singapore

    Kuala Lumpur

    Research data provided by

    C H Williams Talhar & Wong

    Sdn Bhd

    URL : http://www.wtw.com.my

    Foo Gee Jen

    +603 2616 8888

    fgj@wtw.com.my

    Philippines

    Manila

    Jie Espinosa

    +632 888 9988 ext.4016

    jie.espinosa@colliers.com

    Singapore

    Singapore

    Calvin Yeo

    +65 6531 8671

    calvin.yeo@colliers.com

    Thailand

    Bangkok

    Nattawan Radomyos

    +66 2 656 7000

    nattawan.radomyos@colliers.com

    Vietnam

    Ho Chi Minh City

    Nhung Quan

    +84 8 3827 5665

    nhung.quan@colliers.com

    Hanoi

    Huan Le

    +84 4 3941 3277

    huan.le@colliers.com

    Myanmar

    Yangon

    Tony Picon

    +95 931 491 678

    antony.picon@colliers.com

    SOUTH ASIA

    India

    George McKay

    +91 22 4050 4553

    george.mckay@colliers.com

    Vikas Kalia

    +91 12 4456 7531

    vikas.kalia@colliers.com

    Bengaluru

    Goutam Chakraborty

    +91 80 4079 5500

    goutam.chakraborty@colliers.com

    Chennai

    Shaju Thomas

    +91 44 2836 1064

    shaju.thomas@colliers.com

    Gurgaon

    Vikas Kalia

    +91 12 4456 7531

    vikas.kalia@colliers.com

    Kolkata

    Swapan Dutta

    +91 12 4437 5807

    swapan.dutta@colliers.com

    Mumbai

    Nishith Agarwal

    +91 22 4050 4556

    nishith.agarwal@colliers.com

    New Delhi

    Vikas Kalia

    +91 12 4456 7531

    vikas.kalia@colliers.com

    Pune

    Rishav Vij

    +91 20 4120 6438

    rishav.vij@colliers.com

    Pakistan

    Karachi

    S. Fazal Ahmad

    +92 21 3561 2550 2

    fazal.ahmad@colliers.com

    Lahore, Faisalabad

    Naveed Khan

    +92 42 3662 3312 8 (Lahore)

    +92 41 2540 501 4 (Faisalabad)

    Naveed.khan@colliers.com

    Kazakhstan

    Almaty

    Bayan Kuatova

    +7 727 311 54 43

    bayan.kuatova@colliers.com

    AUSTRALIA

    Melbourne

    Simon Hunt

    +61 3 9612 8818

    simon.hunt@colliers.com

    NEW ZEALAND

    Auckland

    Rob Bird

    +64 9 356 8803

    rob.bird@colliers.com

    Wellington

    Jim Pinson

    +64 4 470 3917

    jim.pinson@colliers.com

    For further details, please contact:

    http://www.linkedin.com/company/colliers-international?trk=hb_tab_compy_id_5227https://www.facebook.com/colliersglobal?rf=105632526137251https://twitter.com/ColliersIntl

    Asia Pacific Office Markets_New 2015-05-07Inside Page_Map 2Q2015 - 2-Yr Forecast