Technology-related sectors boost office demand in Asia in second quarter
Online P2P financial services in Shanghai and e-commerce in India drive uptake
With a number of Asian office markets plagued by excess supply, leasing demand has been driven by sectors empowered by technology, according to Knight Frank.
The property consultant said online peer-to-peer financial services in Shanghai and e-commerce in India were driving leasing demand for office space.
In its second-quarter Asia-Pacific Prime Office Rental Index report, Knight Frank said 11 of the 19 markets tracked experienced rental growth, while three registered no movement and five saw rental declines.
Overall, the index increased 1.2 per cent in the second quarter of the year, as the average vacancy rate dropped by a tenth of a percentage point.
Tokyo saw the highest rental growth in the region, with an annual increase of 17.2 per cent compared with the end of June last year on the back of an uptick in cyclical economic conditions.
Perth continued to be at the bottom of the list, following on from the first quarter of the year.
Hong Kong and Taipei continued to enjoy moderate rental growth. Hong Kong leasing demand was generated by financial institutions from China, especially fund houses.
In China, Knight Frank said sustained strong supply lifted the vacancy rate and lowered rents in Beijing.
"Moving forward, a dearth of new completion in the second half of the year will give landlords a break," it said in the report.
The situation in Shanghai was just the opposite.
No office space was added in the quarter, boosting the occupancy rate and rents.
Knight Frank said it expected rents in 12 markets to either increase or remain steady over the next 12 months.