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Knight Frank Asia-Pacific Prime Office Rental Index

13 June 2017

Malaysia – Knight Frank, the independent global property consultancy, today launches the Asia-Pacific Prime Office Rental Index for Q1 2017. This quarter, the index sees the addition of Manila, bringing the total number of markets tracked to 20. For Q1 2017, the index grew 1.0% quarter-on-quarter due to rising rents in 10 of the markets over the quarter, with rental declines experienced in five of the 20 markets tracked. 

Results for Q1 2017

·         Bangkok remained the strongest performer on the index, recording both the highest quarter-on-quarter (3.1%) and year-on-year (9.6%) growth rates in Asia-Pacific. Rents have been on the rise for more than two years and are expected to persist due to strong absorption amidst tight supply.

·         Both Tokyo and Manila tied at the bottom of the index with a 1.1% decline quarter-on-quarter.

o   In Tokyo, vacancy rates for prime space have been increasing as Tokyo’s office market comes off its peak.

o   Despite a decline this quarter, Manila’s office rental take-up has been robust against the backdrop of its strong economy – rents were on a rising streak over the last 15 consecutive quarters up till Q1 2017.

·         Mainland Chinese companies remained the most important source of new take-up in Central of Hong Kong (2.5%) Island, as landlords stayed aggressive due to limited supply, thus further pushing rental levels upwards.

·         Over the next 12 months, Knight Frank expects rents in 15 out of the 20 tracked cities to either remain steady or increase, up from 12 in the previous forecast. 

Mr Nicholas Holt, Head of Research for Asia-Pacific, says, “US political uncertainty, rising interest rates and Chinese capital controls all made waves during the first quarter of 2017. Amidst these uncertainties, however, global economic activity continued to gain momentum. 

“With a moderate rise in commodity prices and improving market sentiment, these positive elements bode well for several Asia-Pacific prime office markets for the rest of the year.”

Teh Young Khean, Executive Director of Corporate Services, Knight Frank Malaysia comments, “The Kuala Lumpur office market continued to be under pressure during the quarter under review amid high impending supply and weak occupational demand. Landlords, faced with challenges in the market, are more willing to make concessions.” 

Asia-Pacific Prime Office Rents

City

Submarket(s)

3-month % change

(Q4 2016-Q1 2017)

Forecast next 12 months

Bangkok

CBD

3.1%

Increase

Seoul

CBD, GBD, YBD

2.9%

Increase

Hong Kong

Central

2.5%

Increase

Brisbane

CBD

2.3%

Increase

Guangzhou

CBD

2.2%

Increase

Perth

CBD

1.9%

Decrease

Sydney

CBD

1.4%

Increase

Melbourne

CBD

1.3%

Increase

Jakarta

CBD

0.5%

Decrease

Taipei

Downtown

0.2%

Same

Phnom Penh

City Centre

0.0%

Same

Shanghai

Puxi, Pudong

0.0%

Same

Bengaluru

CBD

0.0%

Increase

Mumbai

BKC

0.0%

Increase

New Delhi

Connaught Place

0.0%

Same

Kuala Lumpur

City Centre

-0.8%

Decrease

Beijing

Various

-0.8%

Decrease

Singapore

Raffles Place, Marina Bay

-0.9%

Same

Manila

Various

-1.1%

Increase

Tokyo*

Central 5 Wards

-1.1%

Decrease

Source: Knight Frank Research / *Sanko Estate

 

END

 

 

To download the report, please visit:

http://bit.ly/2qM8IU8

 

For further information, please contact:

 

Mr Nicholas Holt, Head of Research for Asia-Pacific

nicholas.holt@asia.knightfrank.com +86 10 6113 8030 @nholtKF

 

Ms Rachel Loke, Head of Asia Pacific Marketing, Communications & Digital

rachel.loke@asia.knightfrank.com +65 6429 3587 @knightfrank

 

Ms Seline Soo, Marketing & Communications Manager, Knight Frank Malaysia

seline.soo@my.knightfrank.com +603 2289 9669 @KnightFrank_my

 

 

Notes to Editors

Knight Frank LLP is the leading independent global property consultancy. Headquartered in London, Knight Frank has more than 14,000 people operating from 413 offices across 60 countries. The Group advises clients ranging from individual owners and buyers to major developers, investors and corporate tenants. For further information about the Company, please visit knightfrank.com. 

Knight Frank has a strong presence in Malaysia with its headquarters in Kuala Lumpur as well as branches in Penang, Johor and Kota Kinabalu. The company offers high-quality professional advice and solutions across a comprehensive portfolio of property services and is registered with the Board of Valuers, Appraisers and Estate Agents. The Company is licensed to undertake property, valuations / consultancy, estate agency and property management and is also on the panel of all leading banks and financial institutions. For further information about the Company, please visit www.knightfrank.com.my.