Rising inflation, shrinking exports and flagging economic growth have dampened business confidence across Asia and slowed prime office rent growth.
CB Richard Ellis (CBRE) said on Tuesday, in its second quarter office market report for the Asia-Pacific region, that top financial and professional services firms have begun to slow their expansion in the region.
Potential corporate occupiers have become more cautious about committing to premium space and some have deferred major real estate decisions for the time being.
Tokyo registered a decline of 5.1 per cent in prime office rent and India was hit by growing caution as some space occupiers and tenants slowed their expansion plans.
CBRE said office space demand in South-east Asia generally slowed during the second quarter with net absorption in Bangkok hitting their lowest levels in the past five years.
Singapore was among those that bucked the trend. Leases are still being signed as multinational companies relocate to Singapore and companies expanded in the prime areas.
However, the volume of leasing transactions driven by expansion was lower for the second consecutive quarter. This suggests that while demand remains positive, it is slowing.
Source : Channel NewsAsia – 5 Aug 2008