1.5 million square metres of office space absorbed in Asia Pacific market in Q2: DTZ

Around 1.5 million square metres of office space was absorbed in the Asia Pacific market in the second quarter of this year.

That’s almost five times the amount recorded during the same period in 2009.

A new research report released by global property adviser DTZ has found that occupied space in the Asia Pacific region increased significantly in the quarter, as companies resumed expansion plans and upgraded to better quality space on the back of strong economic growth.

DTZ forecasts that prime rents in the region will grow by an average of 6.2 per cent annually between 2010 and 2014, with two of Asia’s ‘tigers’ – Hong Kong and Singapore – expected to outperform this forecast.

According to DTZ’s Asia Pacific Property Times, net absorption in Beijing increased 50 per cent quarter-on-quarter.

This takes net absorption for the first half of the year to almost 278 thousand square metres – only 5.0 per cent less than the whole of 2009.

In Delhi, a 30 per cent increase quarter on quarter means that take-up in 2010 has already surpassed the full year 2009 level.

DTZ’s head of Asia Pacific Research, David Green-Morgan said better than expected economic conditions in the region were boosting business sentiment and strengthening demand as companies upgraded to better quality space.

In fact, Mr Green-Morgan said while the pace of the recovery varied across markets, DTZ’s rental growth forecasts have largely returned to positive growth.

He forecasts that average prime rents, on a capital-weighted basis, will increase by 4.6 per cent this year.

However, Mr Green-Morgan said a cause for caution in the region was the substantial development pipeline, which may dampen rental growth in some markets as vacancy levels increase.

Source : Channel NewsAsia – 11 Aug 2010

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