The requested news item does not exist. Please return to News
Jones Lang LaSalle Releases Asia Pacific Office Index for Q1 2012
Dr Chua YangLiang
Office Rental Increases Slowing Whilst Capital Values Remain Resilient in Asia Pacific
Jones Lang LaSalle Releases Asia Pacific Office Index for Q1 2012
singapore, 2 May 2012 – Jones Lang LaSalle (NYSE: JLL) the global financial and professional services firm specializing in real estate, has today released its Q1 Asia Pacific Office Index Report [www.joneslanglasalle.com]. The Index monitors grade A net effective rents in 27 key markets in Asia Pacific, and found that in the first quarter, compared to Q4 2011, rents increased in 13 markets, were static in three markets and declined in 11 markets. Aggregate rental growth across the region in Q1 2012 averaged just 0.2 percent quarter on quarter, slowing further from 0.9 percent in the previous quarter. The Index also reported that most major Asia Pacific markets saw increasing or stable capital values in 1Q 2012. Across the region, the average quarterly increase in capital values was 0.8 percent, slowing moderately from the 1.2 percent recorded in 4Q 2011.
· On a year-on-year basis, Beijing and Jakarta saw the strongest rental growth across the region (around 50 percent).
· Capital values in Jakarta and Beijing recorded the largest quarter on quarter (4 to 8 percent) increases (40 to 50 percent year on year), largely in tandem with rental growth.
Jeremy Sheldon, head of Asia Pacific Markets at Jones Lang LaSalle said: “We continue to see a mixed picture across the office leasing markets in Asia Pacific. Whilst continued take-up from domestic companies is driving growth in markets such as Jakarta and across India, we have seen leasing demand slow elsewhere as a result of overall caution amongst corporates, the de-leveraging in the financial sector and slower supply additions in some markets. From an occupier perspective, maximising the productivity of their occupied real estate is the focus and if we see further declining rents in the more financially orientated markets, the opportunities to achieve this goal could be greater.”
Dr Jane Murray, head of Asia Pacific Research at Jones Lang LaSalle added: “Continuing global economic uncertainties, particularly in the Eurozone, have impacted corporate hiring and office leasing demand in Asia Pacific in the first few months of 2012. The Asia Pacific economy should still grow significantly faster than the rest of the world this year, although most countries in the region are likely to see a moderate economic slowdown compared to last year. This should result in a similar slowdown in aggregate leasing volumes during 2012, following a record year for take-up of space across Asia Pacific in 2011.”
Dr Chua YangLiang, head of Research South East Asia at Jones Lang LaSalle comments “On the back of a weak business and financial environment, the office market in Singapore continued to face downside pressure especially with the supply overhang, resulting in rising vacancy. We expect prime rents in Raffles Place to ease by 13-15% for the full year.”
· Net effective rents corrected by 5 to 6 percent in Hong Kong and Singapore as some landlords lowered asking rents in view of on-going contraction in the financial sector coupled with some tenants moving outside of the Central Business Districts (CBDs).
· Some Multi National Corporations in China are withholding expansion plans in the short-term, although take-up is being supported by demand from domestic firms and previously secured commitments in new completions.
· The Beijing and Jakarta CBDs continued to see the largest quarter on quarter rental increases although growth eased further from 4Q11 (to between 5 and 8 percent), as vacancy levels fell further in both markets.
· Rents in Australasia were relatively stable, although Brisbane and Perth recorded quarterly changes of between 3 and 4 percent.
· Net effective rents in Tokyo and Seoul fell further (up to 2 percent) as landlords remained generous with incentives, while rents declined moderately in Taipei and Kuala Lumpur due to either weak tenant demand or more supply.
· Average rents in India saw flat or marginal rental growth.
Capital Value Highlights:
· CVs in Shanghai remained flat on the back of slower rental growth and a slowdown in investment activity.
· CVs in Singapore and Hong Kong were largely stable despite rental correction, supported largely by local investor interest.
Looking ahead, Jeremy Sheldon commented: “In spite of an expectation for overall leasing demand to weaken moderately this year, we still expect positive rental growth for most markets in Asia Pacific this year. Jones Lang LaSalle anticipates single digit rental growth for most markets for 2012, with the strongest growth of up to 25 percent likely to be seen in markets such as Beijing and Jakarta. Hong Kong and Singapore are likely to see some further declines. A few other markets such as Seoul and Taipei are also likely to see either no growth or some residual rental declines. “
Jane Murray concluded: “Capital values are expected to grow at a slower rate in most markets in 2012, due to more moderate rental growth as well as the continuation of tight credit conditions. Despite on-going rental adjustment, capital values should remain largely stable in Hong Kong and fall less than rentals in Singapore. Markets expected to see the strongest growth include Jakarta and Beijing, with increases of up to 30 percent forecast for the full year.”
– ends –
DO NOT DELETE THIS TEXT
About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2011 global revenue of $3.6 billion, Jones Lang LaSalle serves clients in 70 countries from more than 1,000 locations worldwide, including 200 corporate offices. The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 2.1 billion square feet worldwide. LaSalle Investment Management, the company’s investment management business, is one of the world’s largest and most diverse in real estate with $47.7 billion of assets under management.
Jones Lang LaSalle has over 50 years of experience in Asia Pacific, with over 22,000 employees operating in 78 offices in 14 countries across the region. The firm was named the Best Property Consultancy in Asia Pacific at 'The Asia Pacific Property Awards 2011 in association with Bloomberg Television'. For further information, please visit our website, www.ap.joneslanglasalle.com
200 East Randolph Drive Chicago Illinois 60601 │ 22 Hanover Square London W1A 2BN │ 9 Raffles Place #39–00 Republic Plaza Singapore 048619