Asia Pacific started 2014 on a softer note. Many of the headline economic indicators in Q1 suggested disappointing growth across the Asia Pacific Economists have revised down GDP growth forecasts for the region as to 4.1% for 2014, compared to 4.2% growth in 2013.
Both landlords and occupiers adopted a cautious approach in launching projects and committing to new space respectively in Q1. Net absorption region slipped to 1.3 million sq m, down 28% from the previous quarter 1). Supply also fell 27% in Q1 to 1.8 million sq m.
The vacancy rate edged up slightly in Q1 to 13.5% regionally, largely due supply glut in India. On the other hand, absorption was broadly in line supply in China, whilst leasing demand in Japan and Singapore held steady Q1.
Office rental growth moderated slightly in Q1, with 17 out of 39 markets posting growth and 11 markets a decline. As a result, on average rents Pacific stayed largely unchanged from their level at the end of 2013. The which did occur were mostly in major North Asia cities, including Tokyo Beijing, while momentum in Singapore and Jakarta continued. In contrast, weakness was more pronounced in Indian and Chinese tier II cities.
Source : DTZ (Groupe UGL)