APAC office property market to see record levels of new supply in 2022

Supply will increase 13% y-o-y to hit 6.9 million sqm.

Despite construction delays during the pandemic, JLL says Asia Pacific is set to register a record supply of 6.9 million sqm in 2022, up 13% year on year. 

The supply wave is expected to crest in 2023 with volumes returning to the five-year average in 2024. Approximately 40% of 2022 supply is planned for CBD locations where occupancy levels are expected to remain more resilient.

Here’s more from JLL:

Continued improvements in vaccine rollouts should sustain recent improvements in business confidence. In turn, this should see occupiers finalise leasing decisions, supporting improvements in leasing activity. We predict net absorption will return to normal levels in 2022 and our forecast calls for 4.5 million sqm of net absorption, a 20% improvement on 2021’s level.

Industry drivers 

• Financials: On average, financials have the highest affordability among occupier categories and, as such, we expect to see them continue to drive demand for higher rent CBD locations. 

• IT/TMT: This sector saw some of the highest levels of remote working during the pandemic and IT/TMT companies put leasing decisions on hold. We expect to see these companies bring staff back to the office and strengthen leasing demand. 

• Flexible space operators: These firms are likely to grow their footprints in the coming years as occupiers experiment with incorporating flexible space in their real estate portfolios and landlords turn to operators to help tap into demand from smaller occupiers.