The prospects for growth in Asia Pacific weakened in the first half of 2013, even though its economy outpaced other parts of the world, revealed a Knight Frank report.
There are concerns that growth could drop further this year, after China’s expansion rate fell 7.5 percent year-on-year in Q2 2013 from over 10 percent on average in the last decade.
Elsewhere, growth forecasts for 2013-2014 have been tempered, considering the likely tapering of QE3 in the US and the slowdown in emerging markets. Notably, the increase in US bond rates saw an outflow of capital and the weakening of currencies, particularly in Indonesia, Thailand and India.
Over in China, slow economic conditions have affected the office market with prime rents in Guangzhou, Shanghai and Beijing falling over 1H2013. The change of government in Australia has not improved its gloomy outlook, with China’s slowdown affecting office demand, evidenced by the negative absorption and falling rents in all major CBDs.
After witnessing two quarters of robust rental growth, Japan’s prime office rental market dipped slightly in Q2 2013. However, the move towards more earthquake tolerant offices and the ongoing impact of “Abenomics” will ensure the country sees healthy rental growth for the next year.
On the other hand, Bangkok saw prime office rents increase, while rents in Jakarta soared 25.5 percent over the first half.
Meanwhile, China and India stood out as having the biggest future supply.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories email romesh@propertyguru.com.sg
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