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May 14, 2013, 01.24 PM IST | Source: Moneycontrol.com

Demand for office space in Asia Pacific subdued

Jones Lang LaSalle releases Q1 2013 Asia Pacific Office Index

Jones Lang LaSalle releases Q1 2013 Asia Pacific Office Index
 
SINGAPORE, 14 May 2013 - Leasing activity in Asia Pacific’s Tier 1 office markets remained generally subdued in the first quarter of 2013, according to real estate advisory firm Jones Lang LaSalle, in its latest Asia Pacific Office Index. 
 
Whilst take-up of grade A office space contracted in Singapore, Hong Kong, Australian cities and Beijing, it was steady in Japan, South Korea and emerging Southeast Asia; strong demand in Manila and Jakarta was actually constrained by a lack of available space.
 
Jeremy Sheldon, Managing Director, Markets, said: “Overall, while business sentiment amongst occupiers is better in 2013 compared 2012 this has not translated into activity as yet the "lag" between business optimism and take-up means we are likely to see a pick up toward year end and into 2014. There is a keen focus across all industries on better space utilisation, which if anything will to add to this "lag". This slowdown is being affected by both international and domestic firms, who, until recently had been a big component of the take-up. Companies remain very cautious in forecasting their space needs.”
 
Net effective rents in the first quarter of 2013 were flat or grew only modestly across the region; of the 27 featured markets in the Jones Lang LaSalle Index, 14 saw a quarterly increase and the remainder either stabilised or declined. Aggregate rental growth across the region averaged 0.3 percent quarter on quarter, compared to 0.4 percent in Q4 2012.
 
Anuj Puri, Chairman & Country Head, Jones Lang LaSalle India, says, “India’s economy performed below trend in 2012. India’s GDP growth came in at roughly 5% for 2012, the weakest result since 2009. The economic slowdown seems to have bottomed out, but any recovery in 2013 may be tepid due to on-going weakness in the manufacturing sector and Government spending cuts. Inflation is still relatively high (6.0% y-o-y in March), although it has moderated in recent months, partly due to weak domestic demand. GI expects economic growth to strengthen moderately to 6.0% in 2013. Slow office leasing activity continues in 1Q 201313 as well; however, it is likely to be marginally better than that witnessed in 2012. We expect 27.2 million sft of office space net absorption in CY 2013.”
 
Jakarta saw the largest quarterly rent increase (7.4 percent) due to a lack of quality space in the market, and increases of between one and four percent were seen in other emerging Southeast Asian markets (Kuala Lumpur 2.3 percent and Bangkok 4.1 percent).
 
Beijing, which was a strong performer in 2012, saw the largest quarter on quarter rental decline (-3.7 percent) as leasing activity slowed markedly. Rents declined further in Hong Kong (-1.3 percent) as landlords at the top end of the market have remained under pressure, although rents in Singapore stabilised for the first time since 3Q 2011. Effective rents fell in most Australian cities, by one to three percent, with the biggest quarterly fall of 3.3 percent in Perth.
 
Dr Jane Murray, Head of Asia Pacific Research, Jones Lang LaSalle commented:  “Landlords are taking a cautious stance on asking rents and we expect corporate occupiers to remain reluctant to pay higher rents.  We do however expect the market to become more favourable to landlords after mid-year as regional economic growth gradually picks up. Whilst we think that rental growth will be limited in most markets in the short term, we expect single-digit growth for the full calendar year, with rents in Hong Kong, Singapore and Beijing starting to recover in the second half and the biggest uplift likely to be seen in Jakarta.”

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Mumbai
Capital Values Rate/Sq ft (INR)
Aajiwali
3000 - 5000
Ambernath
3000 - 5000
Badlapur
1000 - 3000
Bhandup (West)
11000 - 13000
Chembur (East)
15000 - 17000
Chembur (West)
11000 - 14000
Dombivali (East)
4000 - 6000
Ghatkopar
13000 - 15000
Heeranandani Gardens Estate - Powai
25000 - 30000
Hiranandani Gardens Estate - Powai
25000 - 30000
Kalyan (East)
2000 - 4000
Kalyan( West)
3000 - 5000
Karjat
1000 - 3000
Khandala
8000 - 10000
Kharegaon
5000 - 7000
King Circle
17000 - 28000
LBS Marg
12000 - 15000
Lonavala
3000 - 5000
Mulund (East)
11000 - 14000
Mulund (West)
11000 - 14000
Mumbai Nasik Highway
3000 - 6000
Powai
15000 - 17000
Senapati Bhagath Singh Road
3000 - 5000
Sion (East)
18000 - 21000
Sion (West)
17000 - 22000
Tilak Nagar
12000 - 22000
Ulhasnagar
3000 - 5000
Vikhroli
11000 - 14000
4 Bunglows
17000 - 28000
7 Bunglows
13000 - 23000
Chandivali
10000 - 15000
Malad (East)
12000 - 14000
Versova
21000 - 24000
Airoli
4000 - 8000
Belapur
6000 - 9000
Ghansoli
6000 - 8000
Kalamboli
4000 - 9000
Kamothe
4000 - 6000
Nerul
7000 - 10000
Palm Beach Road
12000 - 15000
Panvel
3000 - 6000
Sanpada
8000 - 10000
Sea Woods
8000 - 10000
Ulwe
3000 - 6000
Uran
3000 - 6000
Vashi
9000 - 12000
Altamount Road
62000 - 72000
Breach Candy
62000 - 74000
Chowpathy
48000 - 58000
Colaba
42000 - 46000
Cuffe Parade
67000 - 69000
Dadar(East)
32000 - 34000
Dadar(West)
29000 - 32000
Lower Parel
32000 - 34000
Mahalaxmi
38000 - 40000
Malabar Hills
68000 - 75000
Mumbai Central
23000 - 34000
Napean Sea Road
66000 - 74000
Parel
26000 - 34000
Prabhadevi
37000 - 39000
Tardeo
41000 - 49000
Worli
36000 - 41000
Andheri (West)
18000 - 20000
Andheri(East)
15000 - 17000
Bevarly Park
5000 - 7000
Bhayander (East)
5000 - 6000
Bhayander (West)
3000 - 5000
Boisar
1000 - 3000
Borivali (East)
11000 - 13000
Borivali (West)
10000 - 14000
Dahisar
4000 - 8000
Goregaon (East)
13000 - 17000
Goregaon (West)
12000 - 14000
Kandivali (East)
12000 - 14000
Kandiwali (West)
11000 - 12000
Malad(West)
9000 - 14000
Mira Road
5000 - 7000
Naigaon
1000 - 4000
Nala Sopara (Eastt)
3000 - 5000
Nalasopara (West)
3000 - 5000
Poonam Nagar
6000 - 8000
Shanti Nagar
7000 - 9000
Shrishti
6000 - 9000
Vasai Road
1200 - 4000
Virar
1000 - 3000
Note: Price trend are based on asking rate and not necessarily on the transaction date
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