APAC office leasing volume to grow by up to 35% by end-2021
Grade A net absorption increased 28% in Q3 alone.
Leasing demand for offices in Asia Pacific showed signs of recovery in Q3 2021 according to CBRE, with Grade A net absorption increasing 28% q-o-q to 13.7 million sq ft, driven by flight-to-quality relocations as occupiers capitalised on lower rents (-1.8% y-t-d). Demand came primarily from tech and financial companies. As of end-Q3 2021, YTD net absorption was at 33.3 million sq ft, 20% below the 2017-2019 average, prior to the onset of the pandemic.
Here’s more from CBRE:
Tier 1 markets in mainland China continued to register record high net absorption, while several major cities in India recovered strongly from the previous quarter’s low on the back of improving business sentiment and the reopening of the economy.
Despite lockdowns and other restrictions, occupiers in Australia generally remain cautious. Other downbeat markets include Tokyo, where net absorption fell into negative territory for the first time since Q4 2020, driven by relocations to new stock and partial cancellations. Hong Kong SAR registered its eighth consecutive quarter of negative net absorption, signalling the longest local market downcycle in history.
Downward pressure on office rents diminished during Q3 2021, with Singapore, Korea and Tier 1 Chinese cities experiencing rental growth. With the traditional final quarter leasing spurt, CBRE expects full-year leasing volume to increase 30-35% y-o-y, albeit from a low base in 2020