Guess which APAC city had the highest prime office rental growth in the region in Q3
Rents grew 12.1% in this city year-on-year.
In Q3 2022, Knight Frank’s Asia-Pacific Prime Office Rental Index remained stable quarter-on-quarter (QoQ) after observing three consecutive quarters of expansion. Year-on-Year (YoY), the overall index is up 2.3%, the fourth consecutive rise. Overall, vacancy increased by 1.6% from Q2 2022.
Here are some highlights for Q3 2022 according to Knight Frank:
- Bengaluru continues to top Asia-Pacific in terms of rental growth YoY at 12.1%, while Jakarta records highest QoQ growth at 10.5%
- Manila sees highest rental growth rate at 29.1% since Q4 2019
- The Asia-Pacific office market remains largely a tenants’ market for the next 12 months
- Overall vacancy increased by 1.6%, reversing the downward trend of three consecutive quarterly declines
Tim Armstrong, global head of occupier strategy and solutions, Knight Frank, said: “With hybrid working now a feature in the post-pandemic office, occupiers will also increasingly focus on optimising their corporate real estate footprints and look to integrate a degree of flexibility into their portfolios to generate savings. This will sustain a flight-to-quality trend as occupiers seek to maximise rental value and gravitate towards well-amenitised spaces with good connectivity, which are supportive of a hybrid culture, as well as buildings with strong ESG credentials.”
Christine Li, head of research, Knight Frank Asia-Pacific, said: “Vacancies in the region’s offices trended up after three consecutive quarters, set against a backdrop of new supply being released albeit with higher utilisation rates as activity in workplaces climbs to pre-pandemic levels. While the overall regional rents flattened during the quarter against mounting economic uncertainty, most markets were still holding up with a swift return of in-person work. However, concerns over slowing growth will induce more caution over lease commitments and foster more tenant-friendly markets in the region.”