Office demand and occupancy in Asia Pacific will remain intact in 2013, despite the region starting to ease its rapid growth, according to Cushman & Wakefield, the world's largest privately held real estate firm's latest Research Report, Asia Pacific Office Market Forecast for 2013.
The clamour for top-tier space from MNCs will support higher rents in most markets in Asia Pacific, thorough 2013 and well into 2014. On average, rents are expected to grow at or slightly above inflation rate across the region.
Sigrid Zialcita, Asia Pacific Managing Director for Research comments: "The dearth of new supply will sustain tight occupancies in Brisbane, Manila and Perth while the completion of several new projects in some China and Australia cities will provide occupiers seeking top-tier space a chance to expand. Meanwhile, China and India continue to be hotbeds of construction, accounting for over 70 per cent of the millions of square feet expected to be delivered in the region through 2013."
Richard Middleton, Executive Managing Director of Corporate Investor & Occupier Services for Cushman & Wakefield in Asia Pacific commented: "Although rental growth is slowing, tenants are still going to see very significant increases in their occupancy costs at their next reversion in most markets in the region.
"In an effort to combat these rising costs, we expect tenants to drive alternative workplace strategies more aggressively into their occupancy planning in an effort to minimize these increases."
Globalisation will continue to shape demand drivers with the Outsourcing industry offering an enormous upside in 2013 and beyond.
Richard Middleton stated: "The Philippines is becoming increasingly popular as a location for outsourcing business needs. The government has positioned itself as an attractive location for MNCs looking for lower cost locations with a well educated population who are fluent in English. It's for exactly this reason that we recently opened an office in Manila - to service our clients on the ground."
On the investment side, foreign investors and REITs are expected to continue to flock to Asia's prime gateway markets.