Real estate services provider Colliers International’s Asia Pacific Office Market Overview Q3 2011 indicated robust leasing demand drove Shanghai’s prime office average rent up 14.1% Y-o-Y to RMB8 / sq m / day, which rose to ninth place from eleventh in Q2 in Asia Pacific. The report also showed that Shanghai was ranked the world’s sixth financial center in the Xinhua-Dow Jones International Financial Centers Development Index in 2011, moving up two positions from 2010.
Continued growth of local enterprises in Asia Pacific is anticipated to keep the region’s overall office demand stable in the near term, despite the deepening sovereign debt crisis in Europe and the slowdown of China’s overall growth pace, according to Colliers International’s Asia Pacific Office Market Overview 3Q 2011.
In 3Q 2011, office leasing demand from multi-national corporations slowed due to the lack-luster growth prospects around the globe. However, local enterprises in Asia Pacific continued aggressive expansion plans resulting in mixed and uneven rental trends in the region during 3Q 2011. This is largely reflected in the average Greater China office rental growth of 4.5% quarter-on-quarter (Q-o-Q) which out-paced the region’s overall growth of a mere1.3%.
Lina Wong, Managing Director of East and Southwest China and China Investment Services at Colliers International, said, “Despite the impact from European debt crisis, the market is growing in China, though at a slower pace. Several upcoming office projects in Shanghai have achieved high pre-lease occupancy rates during 3Q 2011. Rental and capital values are expected to increase against the backdrop of the generally optimistic business outlook for Shanghai and China as a whole. Demand for office space from luxury brands is particularly strong, and Colliers has recently assisted TOD’S group, the Italian leather goods luxury brand, to lease a 1,490-sqm new office in Wheelock Square in Jing’An district in Shanghai.”
Sales transaction activity in Asia Pacific was relatively quiet. Around the region, the Colliers report noted the lack of en-bloc office sales transaction in Beijing in 3Q 2011, while the office sales transaction volume plummeted almost 70% in Hong Kong. However, on the flip side, other individual markets in the region, underpinned by local private investors’ buying interest, registered exceptionally encouraging sales volume in the quarter. They included Guangzhou in which a number of office projects in Pearl River New City were launched, and Brisbane where strong sales volume of large and prime assets was recorded.
“Looking forward, the continued positive support from sustained capital inflows and private consumption in Asia Pacific is anticipated to hold steady the region’s overall office demand. In the near term, office rents and prices are anticipated to move flatly, while sales volumes will be reduced in most markets in the region except China that will see continued demand from local investors.” Wong added.
Source: Colliers International
