Prime office rental rises 2.4 pct in 2Q
KUALA LUMPUR: Prime office rentals in Asia Pacific increased 2.4 per cent quarter- on- quarter (q- o- q) in the second quarter ( 2Q) of 2018 from 0.9 per cent in 1Q18, driven by rent hikes in Tokyo, Bangalore, Hong Kong and Sydney.
Independent global property consultancy firm Knight Frank said the office market outlook for both Kuala Lumpur and Selangor remained lacklustre, as impending supply coupled with a tight leasing market continued to put pressure on occupancy and rental levels.
“Landlords with older and newly completed buildings, especially in Kuala Lumpur, are more accommodating in providing additional incentives to retain existing tenants as well as to attract potential tenants,” said corporate services executive director, Teh Young Khean in a statement yesterday.
Meanwhile, Bangalore topped the index with a seven per cent qoq increase with rents rising as large corporates jostled for quality space within a finite market, while rental growth in other Indian markets was generally flat in Q2.
Tokyo’s Central 5 Wards GradeA rents grew 5.5 per cent q- o- q as limited supply drove vacancy levels down to a 10-year low of 1.1 per cent during the period.
Knight Frank maintained its expectations for the Asia-Pacific prime office markets to see sustained growth heading into the second half of the year.
“Steady demand seen in the prime office market is expected to bolster rental growth for the second half of the year.
“Despite several headwinds, including tensions around trade, regional economic growth continues to fuel demand for Grade-A office space,” added head of Research for Asia-Pacific Nicholas Holt.