Rental growth is being driven forward by strong occupier demand in emerging South East Asian economies claim market experts at Jones Lang LaSalle. Jakarta and Manila are expected to benefit from 6 to 8 per cent growth and 3 to 5 per cent growth respectively in grade A office rentals in the first quarter of 2012. Established markets such as Hong Kong and Singapore will experience a decline in grade A rentals during the first quarter.
Grade A office rentals are predicted to stay stable in other areas of the region during the same period.
In Beijing landlords continue to set high rental expectations, but rental levels achieved in actual deals have been generally stable. Rental value is also expected to remain stable in Delhi, Mumbai and Seoul.
A lot of occupiers in Tokyo continue to trade up to grade A buildings with better earthquake protection but no rental increases are anticipated due to economic uncertainties.
Leasing activity remains strong in Jakarta. The popularity of areas such as the SCBD and mixed use developments in the CBD means tenants are struggling to secure space. The most active occupiers are from insurance, banking, accountancy, oil and gas and consumer goods.
A growth of 10-15 per cent in grade A office rents over the next 12-18 months is expected in Manila.
Hong Kong and Singapore are suffering from a slowdown in new demand.
Jeremy Sheldon, managing director, Markets Asia Pacific Jones Lang LaSalle believes the market is changing in South East Asia.
“We are witnessing a polarisation in the region. Whilst we are seeing a slowing of leasing activity levels in the established markets, there is increasing activity in South East Asia, where we are experiencing higher enquiry levels than we have seen before” he said.
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