Office Investments In Asia Pacific To Rise By Up To 30% In 2022
ASIA PACIFIC – Jones Lang LaSalle (JLL) expects office investments in the region to increase by 20 percent to 30 percent for the whole of 2022, as institutional investors sell less efficient buildings and pay more for green office space, according to the property consultancy’s latest report entitled Asia Pacific Capital Tracker Q4 2021.
JLL said that demand and occupancies of modern Grade A office building are expected to outperform that of their older and lower quality counterparts after the COVID-19 pandemic is over. This will give impetus to real estate developers to upgrade their office assets.
“We expect heightened awareness of quality, health and safety to drive value-add investments,” forecasted the real estate consultancy.
In Singapore, JLL highlighted that the government is driving the shift towards higher-quality and more eco-friendly office buildings via incentives, disclosure, and taxes. In fact, the authorities there raised incentives for greener office properties, published individual building energy efficiency stats in Q4 2021, and will increase carbon taxes in 2022.
Aside from that, the report revealed that Singapore was the strongest office market in Asia Pacific for Q4 2021, as office rents in the city-state edged up by 2 percent quarter-on-quarter during the period under review. On the other hand, Tokyo was named as the weakest office market, as rents there declined by 3 percent on a quarterly basis.
For the whole of 2021, office rents in Singapore climbed by 5 percent. Conversely, it dropped 11 percent in Tokyo, 7 percent in Melbourne and Sydney, as well as 2 percent in Beijing and Hong Kong.
“Office rental growth in Beijing and Singapore are accelerating, giving investors more confidence in these supply-constrained markets,” said JLL, adding that the office rents in Sydney and Melbourne are recovering despite a high supply in the pipeline. Consequently, this is expected to increase investor interest in office assets in both Australian cities.