Grade A Office Rents In Asia Pacific Expected To Rise By 1%
ASIA PACIFIC – Property consultancy CBRE expects overall Grade A office rents across the region would edge up by 1 percent for the whole of 2022, reported The Business Times on Monday afternoon (17 January, SGT).
“CBRE expects 2022 to be characterised by faster decision-making, flight-to-quality relocation and workplace reconfiguration as companies gain confidence in the return to the office and the adoption of hybrid working,” said the real estate consultancy in its report.
Net office absorption is also forecasted to grow by as much as 10 percent this year on an annual basis. However, demand for office space is unlikely to recover to pre-pandemic levels until 2023.
In addition, the stock of Grade A office space in Asia Pacific is projected to increase by 15 percent year-on-year to almost 67 million sq ft in net floor area, the highest annual tally in over 10 years. Most of the upcoming supply will be located in non-CBD areas, which make up 90 percent of new office space, ensuring office occupancy in central business districts (CBD) would remain resilient.
Meanwhile, CBRE projects that the region’s property investment market would reach a record high this year thanks to robust liquidity that is expected to drive a 5 to 10 percent annual growth in deal volumes.
The property consultancy believes that interest in office properties is expected to improve in 2022, while logistics assets would remain sought-after.
“CBRE observed several investors acquiring assets in these two sectors last year by forming joint ventures with operators to take advantage of price dislocation, a trend that will continue in 2022,” said CBRE, adding that its forecasted overall property investment volume is around US$150 billion.
Overall, office yields are projected to hold firm this year, while select cities like Singapore, Sydney, Beijing, and Shanghai could see mild downward pressure on yields as office rents either stabilise or start an upward cycle.
Furthermore, a rebound in rental demand in the coming year is anticipated to end the downward rental cycle in the office and retail property markets, while the logistics sector is forecasted to enjoy another “strong year of growth,” added CBRE.