Asia-Pacific to see 3.7% growth in office occupancy costs

KUALA LUMPUR: The average occupancy costs of prime office space in the Asia-Pacific region are expected to grow by an average annual rate of 3.7% to 2015, driven by above average increases in low cost locations such as China and India, according to the annual DTZ Global Occupancy Cost: Office Survey 2010.

The real estate consultancy’s report also forecasts that growth in occupancy costs in Asia Pacific will double the growth expected in Europe, the Middle East and Africa, and the US. The growth in the region will be driven by the expanding demand from multi-national companies, especially in India and China, and by the limited Grade A space available.  

“The biggest increase in costs globally from 2011 to 2015 will be seen in the southern Indian IT centre of Bengaluru, Hong Kong, Singapore, Beijing and Chennai, underpinned by solid rental growth.

“However, the growth in costs in Bengaluru and Chennai is from a very low base and these markets will continue to offer value to occupiers. Both markets are currently in the bottom 20 of our global ranking, and we expect them to remain there to 2015,” said DTZ forecasting and strategy research associate director Kate Medlicott in a statement.

Occupancy costs per workstation in Bengaluru are forecast to increase by an annual average of 9.75% between 2011 and 2015.

This article appeared on the Property page, The Edge Financial Daily, March 11, 2011.

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