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CBRE details outlook for offices in APAC


Asia Pacific (APAC) real estate is set for a strong year, according to a new report from CBRE, with sectors such as logistics having to deal with an e-commerce boom, and retail competing for prime space across various countries.

Businesses will also have a positive 2015, with cautious expansion throughout the region and improving workspace conditions. Tokyo is one city that will be a leader in this space, while Seoul and Brisbane will lag behind.

This article will take a look at business expansion throughout 2015 and also look at developments in key regions.

On track for positive growth

The new CBRE report explained that APAC will outperform other regions this year, following a successful 2014. In fact, economic growth is currently projected to reach 4.4 per cent. This is significant when compared to the global growth of 2.9 per cent.

"This will provide a supportive macro backdrop along with healthy job prospects, accelerating urbanisation and increasingly wealthy households," CBRE noted.

Economic reform in China as well as "stuttering growth" in Japan were noted as concerns, but APAC remains on track thanks to both corporate and investor confidence. In turn, this is supporting demand from real estate investors.

In total, across office, retail and industrial sectors, CBRE expects rental and capital value growth of around 2-4 per cent this year, with a 5 per cent total increase in APAC real estate investment volume.

Business expansion in APAC

While CBRE predicts that all sectors will experience growth in 2015, the business space is one of particular note.

Corporates will continue focusing on APAC throughout 2015 as a region for growth, with many areas set to see mounting investments. Job growth in particular is one factor that will play a major role, as Thailand, the Philippines and Indonesia see substantial growth rates. In fact, the Philippines alone is set to see growth of 4.3 per cent.

Further south, Australia will see steady job growth, while New Zealand will remain stable.

The regional vacancy rate throughout the region is predicted to continue the downward trend, though finally ending this year. Vacancy increases are expected in cities such as New Delhi, Mumbai and Ho Chi Minh City.

On the other hand, markets including Hong Kong, Auckland and Beijing will see new projects completed and then subsequently absorbed due to demand. CBRE noted that while Hong Kong will see an increase in completions, most space will be unavailable due to reservations or pre-sale.

A look at key regions

To get an idea of rental growth in the office sector in APAC, it's important to look at individual regions more closely.


Strong rental growth has been predicted for the city-state this year, with CBRE expecting a total of 8 per cent. In 2016, expected new stock will give businesses more options when it comes to selecting space.

Sydney and Melbourne

Further south, both Sydney and Melbourne - two of the largest Australian cities - are set to "bottom out of the current trough", and see positive rental growth.


In Indonesia, the capital will see a substantial slow-down when it comes to rental growth. This follows a rent surge (95 per cent) over the past three years as office space was in tight demand.

Based on this new CBRE report, 2015 is certainly set to be an exciting year for the APAC property market, especially given the fact that businesses are predicted to increase investments in this area.

Now is definitely an ideal time to consider the feasibility of property developments, given the demand increases.

Date Published: 27 Feb 2015
Category: General News

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