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Asia-Pacific office market sees revival, says Colliers International

KUALA LUMPUR: Colliers International, in its quarterly Asia Pacific Office Market Overview Report dated April 2010, stated that the office real estate segment is enjoying a revival. It stated that stronger-than-expected recovery registered in a number of centres in 1Q2010 contributed to the region’s gradual return to pre-crisis levels.

“Against this favourable economic backdrop and the sustained positive market sentiment, boosted by the performance of a number of asset and equity markets, the office real estate market in the region displayed corresponding positive signs, with a measurable revival in demand during the period of [1Q2010],” it said.

Leasing trends, the report noted, were encouraging as a number of multinational corporations have reactivated their real estate plans, which was put on hold after the financial crisis struck. “Overall, the leasing markets in the region revived, with rentals edging up by 0.9% quarter-on-quarter in 1Q2010 – the first positive quarterly growth registered in the past one and half years,” said the Colliers report.

As for the sales market, demand is strong despite the continued compression of investment yields in 1Q2010. “Local private investors continued to be one of the key groups of players,” the report explained.

Furthermore, real estate funds are seen reentering the market. An example given was in China, with the sale of Gateway Plaza, a prime office building comprising about 1,416,262 sq ft in the Lufthansa precinct, to the Mapletree India China Fund for US$425 million.

For the rest of the year, Colliers International said the demand for office real estate in the region will continue to grow because of further economic growth, which is expected for the next couple of years. Colliers also predicted that the effects of the projected rise in interest rates would be mild.

Also, do read Colliers Asia Pacific Office Market Overview: Positive Signs with a Measurable Revival in Demand in our Research segment.
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