Downtown forces cut to forecast
Property Consultant Cushman & Wakefield has slashed growth predictions for prime office rents in most Asian cities due to the rapid deterioration in the world's economies.
Most markets are expected to show flat growth this year, though Hong Kong and Singapore face zero growth, but better than the negative territory looming for Tokyo and Seoul.
The consultant's previous predictions had been for blooming growth in most major markets, some of up to 25 per cent during this year. But that was when there were expectations that regional economic conditions would be sustained.
Cushman & Wakefield Asia chief executive Michael Thompson said: 'The rapid turnaround in worldwide economic conditions since the end of last year has considerably weakened office space demand in Asia.'
However, the company retained its earlier growth forecast for Shanghai at 15 per cent in view of accelerating foreign direct investment in the city and robust local economic growth.
Hong Kong's grade-A office rental growth was downgraded to zero from the 20 per cent forecast made in December.
Regional director of research John Su said prime rents had fallen 3.2 per cent in the first quarter, their first decline since the third quarter of 1999.
He said there was a noticeable increase in tenants looking to sublease space, a clear sign of a cooling market.
Singapore's rental growth has been revised down to zero from 15 per cent, and Beijing rents are forecast to grow 10 per cent instead of 25 per cent.