Colliers Asia Pacific 2015 2Q Office Market

1. Economic Overview
Global growth remained modest during 2Q 2015 due to
major markets’ divergent performances. Squarely
focused on domestic developments, the US economy
looks to be on firmer ground while the Eurozone seems
to be rallying by leveraging lower energy costs and
adhering to quantitative easing measures. That said, a
stumble in Germany’s growth and the ongoing Greek
‘Grexit’ crisis highlights the turnaround’s fragility.
Here in Asia, China’s central government has cut its
key lending rate for the fourth time in seven months in
the face of an economic slowdown while the Japanese
economy has experienced a modest recovery following
a slight rebound in consumption.
Leasing Market
The business outlook amongst occupiers in Asia’s
main markets currently remains very cautious due to
the economic outlook and weakening corporate
performance. As a result, cost control is continuing to
influence corporate decision-making with many global
occupiers avoiding ambitious expansion plans and
emphasizing cost efficiencies and workplace
enhancements. Of the key business sectors, IT and
healthcare were the most active in terms of tenant
groups seeking space to accommodate increasing
headcounts and new service lines. The banking and
finance sectors meanwhile are subject to conflicting
forces. While large multi-national banks are
implementing significant cost reduction strategies, their
counterparts in China are actively expanding.
Overall, average prime office rents in Asia experienced
a 1.2% quarter-on-quarter (QoQ) increase in 2Q 2015.
With rental growth of 10.2% QoQ, Jakarta had the
highest cost increase within the region due in part to
the growing IT industry. At the other end of the scale,
new supply of office space in Chengdu have resulted in
office rents showing a QoQ decline of 3.4%.
Sales Market
Activity across Asia has started to pick up with most
real estate transactions concentrated on key markets
such as Shanghai and Sydney due to lower borrowing
costs and weakening currencies. Shanghai has attracted
a couple of major office deals during 2Q 2015 and saw
office real estate investment volume for the quarter
more than triple to US$1.1 billion. Increasingly active
in China’s first-tier cites such as Shanghai, foreign
Real Estate Investment Trusts (REITs) have added
stability to the market by becoming long-term players.
A notable transaction was Mapletree’s Greater China
Trust’s RMB1.88 billion (US$303 million) acquisition
of Sandhill Plaza in Pudong, Shanghai. Elsewhere,
Sydney is dominating Australia’s investment volume
and accounted for around 50% of all volume sourced
largely via groups from the US and Hong Kong.
Market Outlook
The second half of 2015 is expected to show positive
economic growth driven by the US economy’s robust
recovery, lower oil prices, sustained quantitative easing
across the Eurozone and China’s 6-7% economic
growth. Dampening this growth will be the risk of
geopolitical turbulence.
Hong Kong looks likely to witness modest rental
growth due to limited new office space supply while
major mainland markets such as Shanghai, Guangzhou
and Chengdu may experience downward pressures in
rents following the addition of substantial office space
throughout the rest of this year. On the sales front,
yields are likely to compress further during the
remainder of 2015. This is particularly true in key Asia
Pacific markets such as Shanghai, Tokyo and Sydney.
Asia Pacific
Office Market
Asia Pacific | Office
2Q 2015

2. Our Presence in
Asia Pacific
1
Mumbai
Bengaluru
Karachi
Kuala Lumpur
Singapore
Ho Chi
Minh City
Yangon
Chennai
Wellington
AucklandSydney
Brisbane
CanberraPerth Adelaide
Melbourne
Almaty
Jakarta
Delhi NCR
Manila
Taipei
Tokyo
Beijing
Hong Kong
Shanghai
Chengdu
Hanoi
Bangkok
Note : Rents, vacancy rate forecasts and new supply forecasts are referring to prime quality office premises in CBD except India.
In India, rents are referring to prime quality office premises in CBD while new supply and vacancy rate forecasts are referring to the
prime quality space in the whole city.
Supply Forecast 2015
(Million sq ft)
Legend :
Supply Forecast 2016
(Million sq ft)
Prime Office Rents
in CBD, 2Q 2015
(US$ / sq ft / annum)
Forecast
Direction
2015
Vacancy Rate
Forecast 2015
Forecast
Direction
2015
Forecast
Direction
2016
Forecast
Direction
2016
Astana
Guang
zhou
Shenzhen
$52.5 ↑ ↑
6.9% ↓ ↓
1.62
1.51
$43.1 ↔ ↓
10.0% ↓ ↑
0.46
2.06
$66.5 ↔ ↔
2.0% ↔ ↑
0.00
0.32
$33.5 ↑ ↑
20.0% ↑ ↔
10.25
5.15
$14.1 ↑ ↑
43.0% ↑ ↓
0.63
0.86
$33.0 ↑ ↑
15.0% ↑ ↑
8.00
5.50
$10.3 ↑ ↑
13.0% ↔ ↓
12.98
7.08
$93.0 ↑ ↑
12.3% ↓ ↑
0.26
0.59
$19.6 ↓ ↑
52.0% ↑ ↓
10.35
4.31
$35.1 ↓ ↓
26.0% ↔ ↓
0.54
0.43
$9.1 ↑ ↑
19.0% ↓ ↓
3.47
2.90
$22.2 ↔ ↔
12.1% ↑ ↓
2.33
0.19
$84.1 ↑ ↓
4.6% ↓ ↑
0.53
3.58
$41.4 ↓ ↓
19.4% ↑ ↓
1.36
0.33
$41.4 ↑ ↑
10.3% ↑ ↑
6.49
6.10
$57.4 ↑ ↑
6.8% ↑ ↑
4.67
3.64
$53.9 ↑ ↑
11.9% ↑ ↔
7.99
6.59
$82.2 ↑ ↔
6.0% ↑ ↔
5.02
6.60
$26.9 ↑ ↑
17.0% ↑ ↓
1.82
0.36$120.0 ↑ ↑
4.8% ↑ ↑
1.33
1.04
$29.7 ↑ ↑
5.0% ↓ ↓
0.41
0.52 $25.7 ↑ ↑
4.3% ↓ ↓
0.00
0.00
$44.5 ↓ ↓
9.0% ↓ ↑
1.00
1.50
$43.9 ↑ ↑
13.3% ↑ ↑
0.66
1.41
$27.3 ↓ ↑
12.5% ↑ ↓
0.21
0.03
$40.2 ↑ ↑
7.7% ↓ ↑
1.37
1.04
$30.3 ↑ ↑
9.0% ↓ ↓
0.00
0.00
$22.5 ↑ ↑
2.0% ↑ ↓
0.00
0.00
$25.8 ↑ ↑
0.9% ↔ ↑
0.30
0.52
$28.2 ↑ ↑
17.8% ↓ ↓
4.97
7.24
$39.2 ↑ ↓
12.9% ↑ ↑
9.70
26.56

3. Copyright © 2015 Colliers International.
The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to
ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult
their professional advisors prior to acting on any of the material contained in this report.
$2.3
billion in
annual revenue
502 offices in
67 countries on
6 continents
United States:
Canada:
Latin America:
Asia:
ANZ:
EMEA:
Authors:
Simon Lo
Executive Director | Asia
+852 2822 0511
simon.lo@colliers.com
Jessy Chung
Assistant Manager
+852 2822 0643
jessy.chung@colliers.com
140
31
24
39
160
108
$1.70
billion square feet
under management
16,300
Professional
and staff
ASIA
Mark Lampard
+65 6531 8601
mark.lampard@colliers.com
NORTH ASIA
Mainland China
Beijing
Kelvin Chow
+86 10 8518 1633 ext.113
kelvin.chow@colliers.com
Shanghai
Michael Wu
+86 21 6141 3638
michael.wu@colliers.com
Guangzhou
Eric Lam
+86 20 3819 3988
eric.lam@colliers.com
Shenzhen
Ken Kan
+86 755 8825 8648
ken.kan@colliers.com
Chengdu
Bonnie Chiu
+86 28 8658 6288 ext.810
bonnie.chiu@colliers.com
Hong Kong, HKSAR
Hong Kong
Wendy Lau
+852 2822 0550
wendy.lau@colliers.com
(E-141423)
Kowloon
Fiona Ngan
+852 2117 3301
fiona.ngan@colliers.com
(E-197789)
Japan
Tokyo
Katsuji Tokita
+81 3 5563 2117
katsuji.tokita@colliers.com
South Korea
Seoul
Jay Yun
+82 2 6740 2001
jay.yun@colliers.com
Taiwan
Taipei
Amanda Yang
+886 2 8101 1120
amanda.yang@colliers.com
SOUTH EAST ASIA
Indonesia
Jakarta
Bagus Adikusumo
+62 21 521 1400 ext.506
bagus.adikusumo@colliers.com
Malaysia
Kuala Lumpur
Mark Lampard
+65 6223 2323
mark.lampard@colliers.com
*Based in Singapore
Kuala Lumpur
Research data provided by
C H Williams Talhar & Wong
Sdn Bhd
URL : http://www.wtw.com.my
Foo Gee Jen
+603 2616 8888
fgj@wtw.com.my
Philippines
Manila
Jie Espinosa
+632 888 9988 ext.4016
jie.espinosa@colliers.com
Singapore
Singapore
Calvin Yeo
+65 6531 8671
calvin.yeo@colliers.com
Thailand
Bangkok
Nattawan Radomyos
+66 2 656 7000
nattawan.radomyos@colliers.com
Vietnam
Ho Chi Minh City
Nhung Quan
+84 8 3827 5665
nhung.quan@colliers.com
Hanoi
Huan Le
+84 4 3941 3277
huan.le@colliers.com
Myanmar
Yangon
Tony Picon
+95 931 491 678
antony.picon@colliers.com
SOUTH ASIA
India
George McKay
+91 22 4050 4553
george.mckay@colliers.com
Vikas Kalia
+91 12 4456 7531
vikas.kalia@colliers.com
Bengaluru
Goutam Chakraborty
+91 80 4079 5500
goutam.chakraborty@colliers.com
Chennai
Shaju Thomas
+91 44 2836 1064
shaju.thomas@colliers.com
Gurgaon
Vikas Kalia
+91 12 4456 7531
vikas.kalia@colliers.com
Kolkata
Swapan Dutta
+91 12 4437 5807
swapan.dutta@colliers.com
Mumbai
Nishith Agarwal
+91 22 4050 4556
nishith.agarwal@colliers.com
New Delhi
Vikas Kalia
+91 12 4456 7531
vikas.kalia@colliers.com
Pune
Rishav Vij
+91 20 4120 6438
rishav.vij@colliers.com
Pakistan
Karachi
S. Fazal Ahmad
+92 21 3561 2550 2
fazal.ahmad@colliers.com
Lahore, Faisalabad
Naveed Khan
+92 42 3662 3312 8 (Lahore)
+92 41 2540 501 4 (Faisalabad)
Naveed.khan@colliers.com
Kazakhstan
Almaty
Bayan Kuatova
+7 727 311 54 43
bayan.kuatova@colliers.com
AUSTRALIA
Melbourne
Simon Hunt
+61 3 9612 8818
simon.hunt@colliers.com
NEW ZEALAND
Auckland
Rob Bird
+64 9 356 8803
rob.bird@colliers.com
Wellington
Jim Pinson
+64 4 470 3917
jim.pinson@colliers.com
For further details, please contact: