Asian market for office space faces increasing slowdownNovember 6th, 2008 - 6:02 pm ICT by IANS
New Delhi, Nov 6 (IANS) The market for office rentals in Asia has slowed further as a fallout of the global economic crisis, according to realty consultancy firm CB Richard Ellis’ Asia Pacific Office Market Review for the third quarter of 2008. “Leasing activity in India has slowed down during the third quarter. This was because businesses began to feel the impact of financial turmoil,” said Anshuman Magazine, chairman and managing director, CB Richard Ellis, South Asia.
“The low volume of leasing led to a marginal correction in quoted rentals for the New Delhi CBD (central business district). Rentals across premium buildings in Mumbai also underwent a correction while rentals in Bangalore stayed static,” the report said.
“The quarter saw the further easing of momentum in office leasing and the remainder of 2008 is likely to see the end of the upward cycle as potential occupiers grow cautious about committing to premium space,” the report said.
Prime office rentals in the third quarter were static in major CBDs including those in Beijing, Hong Kong, Seoul, Ho Chi Minh City and Singapore. Tokyo recorded its third consecutive quarterly drop in rentals, confirming the early phase of a downward cycle.
Average prime office rents began to consolidate in New Delhi, Shanghai, Manila and Bangkok.
The report says that vacancy levels remain generally lower than those recorded in the third quarter of 1997 during the Asian financial crisis, and many markets have suffered from a supply shortage over the past 12 months.
At the end of the third quarter, 10 markets recorded a vacancy level below 5 percent.
These trends in the Asian office market reflect the deterioration of overall business sentiment across the region. Confidence has taken a hit despite the fact that corporate bankruptcies and job cuts in Asia have been less severe than those in the US and Europe.