jll office markets sentiment survey asia pacific | q3
TRANSCRIPT
Asia Pacific Office Markets Sentiment Survey
The JLL Office Markets Sentiment Survey aims to capture, measure and track the broker sentiment and outlook for key office leasing markets around the region.
Q3 2015
Will leasing activity increase or decrease?
INCREASED ACTIVITY STABLE
Bangko
k
Ho Chi Minh
Aucklan
dMan
ilaSeo
ulSyd
ney
Jakart
aDelh
iOsak
a
Hong Kong
MumbaiTokyo
Shanghai
Beijing
Singapore
Will tenant activity be expansionary?
EXPANSIONARYSLIGHTLY CONTRACTIONARY
SLIGHTLY EXPANSIONARY NEUTRAL
Singapore
Manila
Bangko
k
Hong Kong
Ho Chi Minh
Delhi
Aucklan
d
Mumbai
Jakart
aOsak
aTokyo
Beijing
Sydney
Shanghai
Seoul
Will rents increase or decrease?
RENTS EXPECTED TO RISE
STABLE RENTS EXPECTED TO FALL
Aucklan
dMan
ila
Sydney
Beijing
Delhi
TokyoOsak
a
Mumbai
Shanghai
Seoul
Hong Kong
Bangko
k
Ho Chi Minh
Jakart
a
Singapore
Is it a landlord or a tenant’s market?
NEUTRALLANDLORD TENANT
Hong Kong
Jakart
a
Shanghai
Beijing
Aucklan
dSeo
ulMan
ilaTokyo
Osaka
Bangko
k
Ho Chi Minh
Delhi
Singapore
Sydney
Mumbai
What are the key factors driving the market?
Limited Supply
Rising Rents
Strong Demand
Large incentives
Oversupply
Rents Falling
Weak Demand
Tenant Market Landlord Market
No incentives
Which sectors are the most active?
Professio
nal Serv
ices
Technology
Pharmace
utical
Consumer
Transp
ort
Real Esta
te
Bankin
g
RENTINCREASED Q on Q STABLE
RENTDECREASED Q on Q
Hong Kong
New Delh
i
Singapore
Bangko
kMan
ila
MumbaiTokyo
Shanghai
Jakart
aOsak
aBeiji
ng
Ho Chi Minh City
Seoul
Sydney
Aucklan
d
$12.5
$8
$5.5
$4.1
$2.7$3.6
$2.2$2.1 $1.8
$1.7
$6.6
$6
$4.1
$2.6$2.7
Grade A rents around the region
Asia Pacific Fast Facts
CITY RENT Q-on-Q SENTIMENT MARKET COMMENTARY
AUCKLAND $2.20USD PSF PM
Increased leasing activity is expected as the development pipeline comes on stream and begins to allow some
movement in the market.
$1.7USD PSF PM
BANGKOKInsurance, telecommunications and on-line business are
driving robust demand in Bangkok’s office market, despite a limited availability of Grade A space.
BEIJINGLandlords are being selective on tenant quality, and we are
still seeing more activity from domestic companies, with the exception of IT and domestic startups.
$8USD PSF PM
NEWDELHI
Demand is increasing from start-ups and e-commerce organisations who are price-sensitive but seeking large spaces. Supply will continue to be strained, leasing to
rental increases in some micro-markets.
$2.7USD PSF PM
Asia Pacific Fast Facts
CITY RENT Q-on-Q SENTIMENT MARKET COMMENTARY
HO CHI MINH CITY
$3.6USD PSF PM
There are early signs of market recovery and MNCs have started to review their real estate portfolios more actively.
Some may have demand for expansion and / or relocate to newer buildings; however, CAPEX remains a concern and
impacts their relocation strategy. Saving costs on operations remains crucial to corporates, IT and
Insurance companies. FMCG are still key occupiers and are actively expanding.
$12.5USD PSF PM
HONG KONG
Strong demand continues from PRC companies expanding into HK. Vacancy in Central has reached its lowest level
since 2007 and Landlords are starting to drive rents upwards.
JAKARTA
A new government regulation as of 1st July ensures that USD buildings will be marketed in Rupiah currency. As the Rupiah continues to depreciate, rental rates in USD terms
will decrease but increase in Rupiah because of the exchange rate.
$2.6USD PSF PM
MANILALeasing activity has continued to grow despite rents rising in key locations. Vacancy rates in existing locations are still
below 5% due to high office demand.
$1.8USD PSF PM
Asia Pacific Fast Facts
CITY RENT Q-on-Q SENTIMENT MARKET COMMENTARY
$4.1USD PSF PM
Absorption increase likely to be unsustainable as tenants seek out decreasing levels of Grade A supply. Decision
making at a global level is taking place tepidly given that India has not yet seen the huge boost expected from the
Modi government.
$2.1USD PSF PM
Vacancies have become limited in the Umeda prime office area and some landlords are increasing the rent or
decreasing the free rent period as Osaka transitions to a Landlord favourable market. As tenants return to the CBD,
Umeda continues to be an attractive destination while Yodoyabashi is gaining popularity with large scale tenants.
Poor economic conditions and the effects of MERS are leading to a lack of new demand in Seoul’s office market.
$4.1USD PSF PM
Domestic tenants still active especially in the finance sector. Pudong market rents are increasing rapidly due to
low vacancy when compared with Puxi.
$6.6USD PSF PM
MUMBAI
OSAKA
SEOUL
SHANGHAI
Asia Pacific Fast Facts
CITY RENT Q-on-Q SENTIMENT MARKET COMMENTARY
$6USD PSF PM
Office rents are slowly falling in Singapore, and we expect this trend to continue – although it’s neither a Landlord nor
Tenant favourable market at this point in time.
$2.7USD PSF PM
Sydney is seeing significant activity from the technology sector in the Grade A market. Broad demand has led to
increasing competition for space resulting in a reduction in incentives and growth in effective rents.
Market sentiment is improving as tenant demand and low new office supply in 2016 have contributed to help drive
rental increases. The overall improvement in demand has maintained office vacancies at low levels and landlords are
looking to take advantage at renewal. Competition for tenants looking to relocate remains healthy however.
$5.5USD PSF PM
SYDNEY
TOKYO
SINGAPORE