Asia Pacific Office Market Shows Remarkable Resilience
ASIA PACIFIC – The region’s office property market has shown remarkable resilience, according to a new report from Cushman & Wakefield (C&W) that was published on Market OutReach on Wednesday afternoon (8 December, SGT).
Based on the real estate consultancy’s report entitled “Catch ’22 – Asia Pacific Commercial Real Estate Outlook 2022”, the region is the only office market to witness straight quarters of positive net absorption since the start of the COVID-19 pandemic.
“Although regional vacancy has edged upwards, it is only marginal and primarily driven by supply exceeding demand, which in turn has exerted only a modest downward pressure on rents,” said C&W.
Aside from that, the outlook of Asia Pacific’s office market is promising. For the whole of 2021, demand for office space is projected to hit 55 million sq ft. This is 77 percent higher than the volume recorded in 2020, even though most of the region re-entering prolonged lockdowns when the Delta variant emerged.
“Looking to 2022, demand is expected to increase further to 72 million sq ft – reflective of a stronger recovery across the entire region – before returning to pre-pandemic levels of around 83msf in 2023,” forecasted the property consultancy.
As for flexible working practices, although this work arrangement will likely be widely adopted across Asia Pacific, its effect on office space demand is expected to be minimal as more staff are already returning to their office as compared to in Europe and the United States. This is especially true in China, where employees prefer to work in the office than at home.
“Looking ahead, projected employment growth and a gradual return to office-based working is likely to offset the underlying headwind from remote working. Although the regional vacancy level is forecast to increase to 18 percent in 2023, this disguises the fact that many markets across the region are entering a period of restrained supply over the next 2 years,” adde