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Knight Frank Asia-Pacific Prime Office Rental Index Q2 2018

12 September 2018

12 September 2018, Malaysia – Knight Frank, the independent global property consultancy, today launched its Asia-Pacific Prime Office Rental Index for Q2 2018. The index increased by 2.4% quarter-on-quarter in Q2 – almost three times that of Q1 at 0.9% – primarily driven by rent increases seen in Tokyo, Bengaluru, Hong Kong and Sydney.

Results for Q2 2018

  • The index rise was primarily driven by rent increases seen in Tokyo, Bengaluru, Hong Kong and Sydney.
  • Rents are expected to remain steady or see marginal increases for the rest of 2018.
  • Bengaluru topped the index at a 7% quarter-on-quarter increase. Tight supply pushed rents up as large corporates jostle for quality space within a finite market.
  • Kuala Lumpur’s office market saw the steepest decline, with a 0.8% decrease quarter-on-quarter amidst supply concerns and slow absorption.

Teh Young Khean, Executive Director of Corporate Services at Knight Frank Malaysia says, “The office market outlook for both Kuala Lumpur and Selangor remains lacklustre as impending supply coupled with tight leasing market continue to put pressure on occupancy and rental levels. Landlords with older and newly completed buildings, especially in KL City, are more accommodating in providing additional incentives to retain existing tenants as well as to attract potential tenants.”

Nicholas Holt, Head of Research for Asia-Pacific, says, “Steady demand seen in the prime office market is expected to bolster rental growth for the second half of the year. Despite several headwinds, including tensions around trade, regional economic growth continues to fuel demand for Grade-A office space.”

Asia-Pacific Prime Office Rents 

City

Submarket(s)

3-month % change
(Q1 2018 - Q2 2018)

Forecast next
12 months

Bengaluru

CBD

7.0%

Increase

Tokyo*

Central 5 Wards

5.5%

Same

Melbourne

CBD

4.6%

Increase

Sydney

CBD

4.2%

Increase

Manila

Various

2.4%

Decrease

Hong Kong

Central

1.7%

Increase

Bangkok

CBD

1.7%

Increase

Guangzhou

CBD

1.2%

Same

Brisbane

CBD

1.0%

Increase

Singapore

Raffles Place, Marina Bay

0.8%

Increase

Beijing

Various

0.6%

Decrease

Taipei

Downtown

0.6%

Increase

Perth

CBD

0.3%

Same

Mumbai

BKC

0.0%

Increase

Phnom Penh

City Centre

0.0%

Same

NCR

Connaught Place

0.0%

Same

Seoul

CBD, GBD, YBD

0.0%

Same

Shanghai

Puxi, Pudong

-0.7%

Same

Kuala Lumpur

City Centre

-0.8%

Decrease

Source: Knight Frank Research / *Sanko Estate

END

To download the report, please click here.

For further information, please contact:

Nicholas Holt, Head of Research for Asia-Pacific

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

Seline Soo, Marketing & Communications Manager, Knight Frank Malaysia 

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

Penny Hoo, Marketing Executive, Knight Frank Malaysia 

penny.hoo@my.knightfrank.com +603 2289 9667 @KnightFrank_my

 

Notes to Editors

Knight Frank LLP is the leading independent global property consultancy. Headquartered in London, Knight Frank has more than 15,000 people operating from 418 offices across 60 markets. 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 www.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.