The firm's latest Asia Pacific Property Digest reported that office rents in some markets are reaching all-time highs. "Regional office markets have shown resilience during a time of volatility in the equity market," says Jane Murray, head of research, Asia Pacific. She says the financial centers of Hong Kong, Singapore, Shanghai, Sydney and Tokyo had all registered gains, while the developing markets of Bangkok, Kuala Lumpur, Manila and Jakarta are now trading a shade off their previous peaks in 1997.
Demand is being led by the banking and finance sectors, followed by professional services such as accounting and law firms. Demand from consumer business and IT companies is equally strong and they are willing to pay a premium to state in core locations even if the properties are not necessarily grade A.
Second-quarter rents in Bangkok's central business district rose by 2.9% over the previous quarter, or 12.2% from last year. In Hong Kong (Central), rents jumped 8.9% quarter on quarter, or 39.8% compared to the same period last year. This is the 11th consecutive quarter of growth and the longest streak in 20 years.
Rents in Sydney registered an increase of 10.2% compared to a year ago while in Singapore they grew by 13.5% from the previous three months or 44.4% year on year.
Leasing activity in most cities was hampered by the lack of supply rather than a lack of demand. This was particularly the case in Singapore, Tokyo and to a lesser extent Shanghai, where the majority of newly completed projects were precommitted. Beijing and Shanghai saw increasingly active leasing markets as further deregulation of China's money markets and business services sector is driving greater demand for office space.
The Indian cities of Delhi, Bombay, Bangalore and Madras witnessed a surge in enquiries with rents in some of these cities reaching the levels of Singapore despite the lack of professional property management on the premises.
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