Saturday, May 24, 2014

Jakarta Has the Highest Office Rental Growth in Asia Pacific

  • Jakarta, Manila Shenzhen see highest rental growth in Asia: Cushman & Wakefield
  • Singapore & Tokyo top the chart for Highest rental growth In the Core markets: Cushman & Wakefield

Photo: Reuters

Cushman & Wakefield, the world’s largest privately-held commercial real estate services firm, in its latest Asia Office Q1 2014 report, highlighted that the emerging cities continued to dominate the rental growth in the region with Jakarta (Indonesia) witnessing the highest office rental growth (yoy) among 33 cities in Asia, followed by Manila (Philippines) at 2nd position and Shenzhen (China) at 3rd and Pune (India) at 4th position.

In the Core markets, Singapore (5th) and Tokyo(7th) stood out with positive leasing activity driven by improving business sentiment. While emerging markets with strong domestic economies continued to lead the region in terms of rental growth, a constricted supply pipeline in the core markets such as Tokyo and Singapore were conducive to rental growth. However, for the majority of the region, rental growth remains muted with flat or decreasing rents.

Sigrid Zialcita, Managing Director of Research for Asia Pacific said, “Office market conditions showed a mixed performance in the region. Rental growth was slightly up across Asia Pacific over the year, with an overall regional rental rise of just 2.8% in Q1 2014.

The recovery in the U.S. and Eurozone, reforms and election in some of the countries would provide a boost to overall sentiment and bode well for office market conditions in Asia.  We expect the regional economy to grow at a decent pace, and in turn, support absorption gains across most markets through the rest of 2014.”

Sigrid further added, “Limited availability of Grade A space should enhance landlord leverage and sustain rent increases in some of the core markets this year; However, mounting supply in the emerging markets of Delhi NCR, Kuala Lumpur and Ho Chi Minh City means that these cities will continue to remain favourable to occupiers.”

Jakarta ranked at 1st position to witness highest rental growth in the region
Jakarta witnessed a rental growth of over 27% the highest in the region as the market continues to see the expansion of companies as vacancies tightened to 6.6%. With no new supply delivering in Q1 2014, along with with a number of withdrawals due to redevelopment, occupancies in the capital's office have continued to witness upward pressures. Leasing enquiries and transaction activities were mostly for spaces under 300 sq due to limited availabilities.

Arief Rahardjo, Senior Associate Director, Research & Advisory, Cushman & Wakefield, Indonesia, said, “While this year’s general elections has created a “wait-and-see attitude” in the market, demand is likely to see positive growth, in line with the projected positive performance of the economy in 2014 and an overall business climate that is expected to improve, especially after the presidential election.

Cushman & Wakefield is the worlds largest privatelyheld commercial real estate services firm. The company advises and represents clients on all aspects of property occupancy and investment, and has established a preeminent position in the worlds major markets, as evidenced by its frequent involvement in many of the most significant property leases, sales and management assignments. Founded in 1917, it has approximately 250 offices in 60 countries, employing more than 16,000 professionals. It offers a complete range of services for all property types, including leasing, sales and acquisitions, equity, debt and structured finance, corporate finance and investment banking, corporate services, property management, facilities management, project management, consulting and appraisal. The firm has nearly $4 billion in assets under management globally. A recognized leader in local and global real estate research, the firm publishes its market information and studies online at