asia pacific office market report 2q2011

Download Asia Pacific Office Market Report 2Q2011

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Statistics & Overview of the Asian Pacific Real Estate Market for 2nd Quarter 2011

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  • 1.AsiA PAcificOffice Market Overview2Q 2011Accelerating success.

2. table Of cOntentsAsiA PAcific office mArket overview | 2Q 2011regional overview 3Greater china 4-6Beijing, China ....................................................................................................................................4Chengdu, China .................................................................................................................................4Guangzhou, China .............................................................................................................................5Shanghai, China ................................................................................................................................5Hong Kong SAR, China .....................................................................................................................6Taipei, Taiwan ...................................................................................................................................6North Asia7Seoul, South Korea ........................................................................................................................... 7Tokyo, Japan ..................................................................................................................................... 7southeast Asia8-10Jakarta, Indonesia.............................................................................................................................8Kuala Lumpur, Malaysia ....................................................................................................................8Manila, Philippines ............................................................................................................................9.Singapore ..........................................................................................................................................9.Bangkok, Thailand ........................................................................................................................... 10Hanoi, Vietnam ................................................................................................................................. 11Ho Chi Minh City, Vietnam ............................................................................................................... 11india12-13Bengaluru (Bangalore) ................................................................................................................... 12Chennai ........................................................................................................................................... 12Mumbai ............................................................................................................................................ 13.New Delhi ........................................................................................................................................ 13.Australasia14-17Adelaide, Australia .......................................................................................................................... 14Brisbane, Australia ......................................................................................................................... 14Canberra, Australia ......................................................................................................................... 15Melbourne, Australia ....................................................................................................................... 15Perth, Australia ............................................................................................................................... 16Sydney, Australia ............................................................................................................................ 16Auckland, New Zealand ...................................................................................................................17Wellington, New Zealand .................................................................................................................17Prime office supply and rentals18-19trends & forecasts20-21Definitions & terminology 22-23contacts 24-25 3. regiOnal OverviewecoNomic overviewDuring 2Q 2011 the region continued to be challenged by inflationary pressures. In order tomoderate expectations on further inflation the various central banks in Asia implementedfurther rate hikes during 2Q 2011. The Peoples Bank of China increased its one-yearlending rates to 6.56%, as consumer prices showed no sign of abating during the period.Due to the typical time lag of such monetary policy changes, such measure have not beenimmediately felt and but are expected to reduce growth in the second half of 2011. Inaddition to inflationary concerns, the disruption to the production and supply chain in theaftermath of the catastrophic earthquake in Japan in March 2011 is also predicted to dampenthe economic growth of Japan in 2011. Based on the inflationary pressures in China andrebuilding efforts in Japan the prospective economic growth of the key economies in Asiahave been revised downwards by about 50 basis points during 2Q 2011. For example,economic growth forecast in China has been revised down from 10% to 9..5% for 2011.In Japan, the prospective economic growth this year is also lowered from 1.6% to 1.0%.leAsiNG mArketOn the leasing front, the average office rental in the region slowed distinctively, from 1.7%q-o-q in 1Q 2011 to 0.4% in 2Q 2011. Individual cities in South Asia registered notablerental declines during the period. Although Hong Kong, Beijing and Singapore continued tobe the key performers, with rental growth in the order of 2-3.% q-o-q, there was a generalmarket slowdown in terms of the growth pace of volume during 2Q 2011.sAles mArketBuying momentum varied across various sub-regions during 2Q 2011. In the GreaterChina sub-region, the volume of sale transactions in Beijing was relatively quiet comparedto the previous quarter. Hong Kong was one of the few performers with a double-digitincrease during the period, thanks to the increase of strata-title sales in non-core markets.In other cities of China, demand remained firm, since domestic enterprises continued tolook for quality office space for self-use or investment during the period. However, qualitystock listed for sale remained scarce. In the Australasian sub-region, the volume of theinvestment sale market was generally quiet. In Brisbane, there was only one transactionin the CBD during the first half of 2011. There was also a distinct lack of investment salesin the Sydney CBD during 2Q 2011.mArket outlookLooking ahead, the overall market momentum is anticipated to stage further slowdown asthe current interest rate cycle in the region takes its toll over the near to medium term.Individual markets with the prevailing tight credit conditions are going to show a moresignificant slowdown of transactional sale volume. However, it is our view that occupierswith long-term business commitments in the region will continue with their real estateplans, including upgrading, expansion and consolidation. Individual markets will see anincrease of activity when more quality developments are due for completion in the currentsupply cycles in the next 12 months. colliers iNterNAtioNAl |P. 3 4. asia pacific office market overview | 2Q 2011 cHiNA BEIJING OFFICE SUPPLY, TAKE-UP &Beijing VACANCY RATE No new project was completed during 2Q 2011. Demand for quality office space remained 1.00 25.0%robust, underpinned by MNCs and domestic enterprises active pursuit of premises for 0.80 20.0%expansion, relocation, renewal and new leasing. The overall vacancy rate in the Beijing Grade A office market dropped by 2.21 percentage points q-o-q to 5.3.5%. On the other Vacancy Rate15.0%Million sq m 0.60 hand, the average rent surged to RMB23.1.83. per sq m per month, up 12.3.7% q-o-q - the largest growth ever. 0.40 10.0% 0.20 5.0% As options for tenants securing sufficient spaces were limited, most large-size deals 0.00 0.0%20082009 20102011 F 2012 F were clustered in newly launched projects or ongoing developments. For example,SupplyTake-up Vacancy Rate China Construction Bank and Volkswagen Finance took up 26,000 sq m and 8,000 sq m at Beijing IFC, respectively. Monsanto and Sojitz Corporation committed to take 2,800 sq m and 2,000 sq m, respectively, at Phoenix Place Phase II, which is scheduled for completion in the second half of 2011. BEIJING OFFICE CAPITAL AND RENTAL VALUES 700.00 70,000 The Beijing office investment market was relatively quiet compared to previous quarters. 600.00 60,000 Only one en bloc sales transaction was concluded in the Wangjing area. Media Tek from 500.00 50,000 Taiwan purchased a building under construction within the Beijing Electronic City for a Capital Values 400.00 40,000 total consideration of RMB412 million.Rentals 300.00 30,000 200.00 20,000 mAjor trANsActioNs 100.00 10,000 BuilDiNGleAse (l) / teNANt / PurcHAser AreA 0.00 0sAle (s)(sq ft) 1Q 20081Q 2013 F 2Q 2008 3Q 2008 4Q 2008 1Q 2009 2Q 2009 3Q 2009 4Q 20091Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 20112Q 20113Q 2011 F4Q 2011 F1Q 2012 F2Q 2012 F3Q 2012 F4Q 2012 F A building under construction S Media Tek 279,900 Rentals (RMB / sq m / Month) Capital Values (RMB / sq m)within the Beijing Electronic City Beijing IFC L China Construction Bank86,100 Beijing IFC L Volkswagen Finance 36,600 Beijing IFC L AIA30,100 Phoenix Place Phase IIL Sojitz 48,400 Raycom Infotech Park TowerL National Instruments 43,100Corporation Silver TowerLHNA Group 36,600 CHENGDU OFFICE SUPPLY, TAKE-UP & chengdu VACANCY RATE The new projects introduced in Q3. 2010 continued a positive leasing progress, but some 0.25 50.0% newly signed tenants just moved to a new office building from an original one, so the 0.20 40.0% actual take-up volume was very limited. Thus, the vacancy rate of general mark

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