jll office markets sentiment survey asia pacific | q3

Asia Pacific Office Markets Sentiment Survey

The JLL Office Markets Sentiment Survey aims to capture, measure and track the broker sentiment and outlook for key office leasing markets around the region.

Q3 2015

Will leasing activity increase or decrease?

INCREASED ACTIVITY STABLE

Bangko

k

Ho Chi Minh

Aucklan

dMan

ilaSeo

ulSyd

ney

Jakart

aDelh

iOsak

a

Hong Kong

MumbaiTokyo

Shanghai

Beijing

Singapore

Will tenant activity be expansionary?

EXPANSIONARYSLIGHTLY CONTRACTIONARY

SLIGHTLY EXPANSIONARY NEUTRAL

Singapore

Manila

Bangko

k

Hong Kong

Ho Chi Minh

Delhi

Aucklan

d

Mumbai

Jakart

aOsak

aTokyo

Beijing

Sydney

Shanghai

Seoul

Will rents increase or decrease?

RENTS EXPECTED TO RISE

STABLE RENTS EXPECTED TO FALL

Aucklan

dMan

ila

Sydney

Beijing

Delhi

TokyoOsak

a

Mumbai

Shanghai

Seoul

Hong Kong

Bangko

k

Ho Chi Minh

Jakart

a

Singapore

Is it a landlord or a tenant’s market?

NEUTRALLANDLORD TENANT

Hong Kong

Jakart

a

Shanghai

Beijing

Aucklan

dSeo

ulMan

ilaTokyo

Osaka

Bangko

k

Ho Chi Minh

Delhi

Singapore

Sydney

Mumbai

What are the key factors driving the market?

Limited Supply

Rising Rents

Strong Demand

Large incentives

Oversupply

Rents Falling

Weak Demand

Tenant Market Landlord Market

No incentives

Which sectors are the most active?

Professio

nal Serv

ices

Technology

Pharmace

utical

Consumer

Transp

ort

Real Esta

te

Bankin

g

RENTINCREASED Q on Q STABLE

RENTDECREASED Q on Q

Hong Kong

New Delh

i

Singapore

Bangko

kMan

ila

MumbaiTokyo

Shanghai

Jakart

aOsak

aBeiji

ng

Ho Chi Minh City

Seoul

Sydney

Aucklan

d

$12.5

$8

$5.5

$4.1

$2.7$3.6

$2.2$2.1 $1.8

$1.7

$6.6

$6

$4.1

$2.6$2.7

Grade A rents around the region

Asia Pacific Fast Facts

CITY RENT Q-on-Q SENTIMENT MARKET COMMENTARY

AUCKLAND $2.20USD PSF PM

Increased leasing activity is expected as the development pipeline comes on stream and begins to allow some

movement in the market.

$1.7USD PSF PM

BANGKOKInsurance, telecommunications and on-line business are

driving robust demand in Bangkok’s office market, despite a limited availability of Grade A space.

BEIJINGLandlords are being selective on tenant quality, and we are

still seeing more activity from domestic companies, with the exception of IT and domestic startups.

$8USD PSF PM

NEWDELHI

Demand is increasing from start-ups and e-commerce organisations who are price-sensitive but seeking large spaces. Supply will continue to be strained, leasing to

rental increases in some micro-markets.

$2.7USD PSF PM



HO CHI MINH CITY

$3.6USD PSF PM

There are early signs of market recovery and MNCs have started to review their real estate portfolios more actively.

Some may have demand for expansion and / or relocate to newer buildings; however, CAPEX remains a concern and

impacts their relocation strategy. Saving costs on operations remains crucial to corporates, IT and

Insurance companies. FMCG are still key occupiers and are actively expanding.

$12.5USD PSF PM

HONG KONG

Strong demand continues from PRC companies expanding into HK. Vacancy in Central has reached its lowest level

since 2007 and Landlords are starting to drive rents upwards.

JAKARTA

A new government regulation as of 1st July ensures that USD buildings will be marketed in Rupiah currency. As the Rupiah continues to depreciate, rental rates in USD terms

will decrease but increase in Rupiah because of the exchange rate.

$2.6USD PSF PM

MANILALeasing activity has continued to grow despite rents rising in key locations. Vacancy rates in existing locations are still

below 5% due to high office demand.

$1.8USD PSF PM



$4.1USD PSF PM

Absorption increase likely to be unsustainable as tenants seek out decreasing levels of Grade A supply. Decision

making at a global level is taking place tepidly given that India has not yet seen the huge boost expected from the

Modi government.

$2.1USD PSF PM

Vacancies have become limited in the Umeda prime office area and some landlords are increasing the rent or

decreasing the free rent period as Osaka transitions to a Landlord favourable market. As tenants return to the CBD,

Umeda continues to be an attractive destination while Yodoyabashi is gaining popularity with large scale tenants.

Poor economic conditions and the effects of MERS are leading to a lack of new demand in Seoul’s office market.

$4.1USD PSF PM

Domestic tenants still active especially in the finance sector. Pudong market rents are increasing rapidly due to

low vacancy when compared with Puxi.

$6.6USD PSF PM

MUMBAI

OSAKA

SEOUL

SHANGHAI



$6USD PSF PM

Office rents are slowly falling in Singapore, and we expect this trend to continue – although it’s neither a Landlord nor

Tenant favourable market at this point in time.

$2.7USD PSF PM

Sydney is seeing significant activity from the technology sector in the Grade A market. Broad demand has led to

increasing competition for space resulting in a reduction in incentives and growth in effective rents.

Market sentiment is improving as tenant demand and low new office supply in 2016 have contributed to help drive

rental increases. The overall improvement in demand has maintained office vacancies at low levels and landlords are

looking to take advantage at renewal. Competition for tenants looking to relocate remains healthy however.

$5.5USD PSF PM

SYDNEY

TOKYO

SINGAPORE

jll office markets sentiment survey asia pacific | q3

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