Feb 25, 2014, Hong Kong - CBRE’s APAC Office Market Outlook 2014 published today, covers a broad range of trends in regional markets on investment, capital markets, occupiers and economic trends.
Key findings from the report on APAC markets, and Hong Kong specific trends:
Global economic recovery is underway but growth expectations in APAC are lower - Capital outflow become the major downside risk include geopolitical risk, volatility in currency market and cooling measures
Office demand is set to rise with moderate rental growth expected, net absorption set to increase by 10% and rent to grow 2.7%. New supply pipeline is significant, mainly emerging markets. Strong investment demand supported by excess liquidity, with capital values expected to strengthen by 2.6% in 2014
Stronger appetite for higher risk assets as investors look for better returns, including decentralized office assets, office in regional cities and value-added opportunities in core areas. Japan, New Zealand and Singapore will be APAC investment hotspots in 2014 with Japan seeing more opportunities for foreign funds to offload assets, New Zealand offering high yields and decent rental growth and Singapore expecting stronger occupier demand and rental growth
In Hong Kong, the most evident trend in the occupier market is the continued adoption of multi-base operations. Increasing numbers of companies are moving away from CBDs to decentralized areas in search of cost effective space. This has led to the convergence of office rents between core areas and secondary locations, and has made relocation to decentralized areas less cost-effective for firms
Companies planning IPO listings in Hong Kong will boost leasing momentum in core areas as they look to open new offices. Development pipeline will remain thin with no large footplate single landlord buildings scheduled for completion on Hong Kong Island until 2017. The limited leasing options will encourage companies to buy their own space
In Hong Kong - Investment sentiment is likely be more influenced by local cooling measures as opposed to QE tapering in the US. End-users and long-term investors will remain the most active buyers in the market. Given the high price of office properties and the generally low yield environment, investors will adopt a value-add angle when making investment decisions
Neither CBRE nor its affiliated companies make any warranties or claims on the implied accuracy of the information contained herein.
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CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2016 revenue). The company has more than 75,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.