- Australian cities to lead regionally whilst Singapore to continue to see correction: Prime Office Rental Growth Forecasts
- Asia-Pacific cities experienced highest rental growth; Hong Kong skyscrapers the world’s most expensive: Skyscrapers Index
- Hong Kong, Tokyo & Singapore – amongst the top 5 most expensive cities to own prime office space
15 September 2016, Singapore – Knight Frank, the independent global property consultancy, launches Global Cities: The 2017 Report, examining the market performance of 31 global cities across the world in light of three major trends shaping the times:
- Negative interest rates have reduced investors’ expectations on what constitutes an acceptable return, which is drawing capital towards real estate.
- Despite the volatile economic environment, the avalanche of technological innovation continues to drive demand for property on a global scale.
- Fast-growing cities are centre stage in the digital and creative revolutions, and in many of those at the forefront, supply is not keeping pace with demand for both commercial and residential real estate.
Prime office rental forecasts
Of the global cities analysed, 12 are in Asia-Pacific – a region continuing to grow in economic importance globally. The prime office rents forecast from Q4 2015 to Q4 2019 however show a huge range of future performance prospects:
- Asia-Pacific markets show a huge range of growth prospects, with Sydney projected to see the strongest growth of 27.5% and Singapore the weakest with a forecast rental decline of 14.0%.
- Kuala Lumpur and Beijing are also expected to experience negative growth at -1.1% and -4.4% respectively.
- Shanghai (19.2%), the only Chinese city on the top 10 chart, sits in the sixth position, a notch down from Melbourne (19.3%).
Nicholas Holt, Head of Research, Asia Pacific, Knight Frank Asia Pacific, says, “Our prime office rental forecasts stretching to the end of 2019 offer an insight into how demand drivers will interact with supply dynamics over the coming cycle.
“Sydney, along with Melbourne, continues to see diversified demand drivers, as the Australian economy continues to show resilience despite the slowdown in demand for commodities; while Shanghai has boomed on the back of strong growth from technology related companies.
“In many ways the weakest projections come down to supply, with Kuala Lumpur, Beijing and Singapore markets all seeing a significant amount of new supply come to the market that new demand is being challenged to absorb.”
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