Asian Commercial Property Yielding Steady Returns

According to the latest Asia Pacific Prime Office Rental Index released by Knight Frank, the index increased 1.3% in the first quarter of 2015, and now sits 5.3% above its pre-crisis (Q2 2008) peak.

Rental growth was experienced in 13 of the 19 markets tracked, with three recording no rental movement and three recording rental declines Northeast Asian powerhouses – Seoul and Tokyo – show similar headline growth figures for Q1 2015, but have significantly differing market characteristics and drivers

Although vacancy is tightening in many markets, the Asia-Pacific regional vacancy rate increased on the back of rising inventories in Greater China’s tier-one cities. In Hong Kong, the prime office rent increased 3.2% in the first quarter of 2015.

David Ji, Director, Head of Research & Consultancy of Greater China at Knight Frank says, “Grade-A office rents on Hong Kong Island are expected to increase steadily throughout the year if limited supply and low vacancy situations continue. Rents in decentralised areas are likely to stabilise with sufficient new office supply in the pipeline.”

Nicholas Holt, Head of Research for Asia Pacific at Knight Frank, says, “In Tokyo, the structure of traditional Japanese leases (which prevents significant rental hikes), has held back rental growth to only 1.9% in a very tight market with little vacancy.”

Over the next 12 months, Knight Frank expect rents in 14 cities out of the 19 tracked to either remain steady or increase, which is in line with their previous forecasts.

WEB'S BEST

Top stories from across the globe

  • Asia Pacific's Top Six Credit Risks For 2017
  • The 5 Most Shocking News in 2016
  • Hazel Moore: Banks Are Completely Wasting Valuable Customer Data
  • Morgan Stanley CEO Makes First-Ever Stock Sales After Bank Rally
  • Former Goldman's Partner in Boutique Venture
  • Hong Kong and Singapore in Push for Fee Transparency
More

PHOTO GALLERIES

finews.asia Networking Event

finews.asia Networking Event

Show pictures

stars China Symposium 2016

stars China Symposium 2016

Show pictures

Compare my salary

Compare my salary

Feeling Underpaid? Benchmark your salary by job title, company and location. Find out where you stand in minutes.

compare my salary

Newsletter

Newsletter-SymbolFree Subscription

Subscribe to our free newsletter and receive daily email alerts from the finews editorial team with a list of the top featured articles.

Share with us

Do you have any market intelligence to share with finews.asia – email us on info@finews.asia – All communication is completely confidential and strictly anonymous.