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Jones Lang LaSalle Fourth Quarter Asia Pacific Office Rental Market Update
HONG KONG & MACAU, 8 December 2011 – Preliminary data from Jones Lang LaSalle shows that grade A office rents will fall in Hong Kong and Singapore in the fourth quarter (Q4) of 2011 and will grow more slowly elsewhere in Asia Pacific.
Jones Lang LaSalle’s market leasing experts predict that Hong Kong and Singapore are entering a rental level correction phase, with anticipated percentage falls in average grade A rents in the final quarter of the year of five to six percent in Hong Kong and around four percent in Singapore (to US$1,643 per sq. m and US$786 per sq. m per annum respectively).
Some office markets are expected to experience continued rental increases in Q4, albeit at a slower rate than previously, including Beijing (circa five percent to US$814 per sq. m per annum) and Sydney (four to five percent to US$470 per sq. m per annum). In the middle ground Jones Lang LaSalle expects to see a number of markets where rents will remain largely static quarter on quarter, including Melbourne, Mumbai, Delhi, Seoul and Tokyo.
Jeremy Sheldon, Managing Director, Markets Asia Pacific at Jones Lang LaSalle said: “Overall rental growth is expected to soften this quarter. The stand out trend across many key markets is a softening of demand from occupiers, as firms are applying caution in light of economic difficulties in the United States and the Euro-zone. We expect corporates in Asia Pacific to remain cautious for the remainder of this year and into next as they wait to see how the region will be impacted by what is happening elsewhere. We do expect to see continuing demand in certain markets where there is a strong domestic focus – China, Japan and India and emerging markets in South East Asia – however the more transparent markets are where occupiers are far more cautious.”
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