According to the latest Jones Lang LaSalle office index, rents for office space in Hong Kong and Singapore increased for the first time since 2011.
Singapore's rents increased by 0.6 percent over the previous quarter, while Hong Kong's rents increased by 1.5 percent. With a 9.8% quarterly growth and a 37 percent yearly increase, Jakarta's office market dominated the region. villas in Doha
However, only 14 of the region's 27 markets saw rises, while the rest steadied or dropped, according to JLL, with overall rental growth of only 0.2 percent compared to the previous quarter.
In the statement, Jeremy Sheldon, managing director, markets, at Jones Lang LaSalle, said, "Demand for office space has been weak throughout the second quarter of this year." "While we've seen some revived engagement from local corporations and specialized areas like pharmaceuticals and technology, the overarching focus remains on cost containment." However, the supply side of many markets remains constrained, which has kept rents relatively flat."
During the quarter, rents in Tokyo, Seoul, Shanghai, Manila, and Bangkok climbed. Beijing's economy shrank by 1.6 percent in the third quarter, following a 3.7 percent drop the previous quarter. The majority of Australian cities had rent decreases, with Melbourne reporting the highest quarterly decrease in the region (6.4 percent), followed by Sydney, Brisbane, and Perth.
JLL predicts that corporate occupiers will be hesitant to pay higher rates for the rest of the year.
"We forecast only single-digit rental growth for the rest of the year, with the largest increase expected to occur in Jakarta, while some areas, such as Beijing, Sydney, and Melbourne, may see minor dips," said Dr. Jane Murray, JLL's Asia Pacific research head. "Continued investor interest will force capital values to climb faster than rents, resulting in yields remaining firm or compressing further in most markets across the region, similar to this quarter's activities."
Jakarta led the region in capital values growth, increasing 10.2 percent during the quarter, while the area as a whole had a 1.7 percent quarterly increase and a 6.8 percent year-over-year increase.
Most economies in the region reported delayed take-up of grade A office space, particularly in Hong Kong, Singapore, Tokyo, and Sydney, which are all financial hubs. Emerging markets in Southeast Asia, on the other hand, saw steady take-up in the second quarter, according to the firm.