Asia Pacific’s key office markets tell a story of resilience overall. Since the pandemic began at the end of 2019, 153 million square feet (msf) of office space has been absorbed across the region’s top 25 markets –- with 47 msf of that absorbed between January and October 2022.
In fact, Asia Pacific continues to be the only region to record consecutive quarters of positive net absorption throughout the pandemic. The broad outlook is for this to continue, though with nuance at the local level.
See the key outlook summaries for Greater China city markets below.
Looking ahead, against the background of normalization of the pandemic, we see consulting companies such as law and accountancy firms, together with high-tech firms, and manufacturing-related R&D centers and biomedicine enterprises supported by national policies, together with financial institutions, rising as the key development industries in Beijing.
In core areas, several prime office projects are scheduled to complete. Simultaneously, the development of high quality office buildings will be accelerated in some emerging commercial areas along the Huangpu River, which will attract more quality tenants given the improved commercial environment and surrounding amenities.
The accelerated construction of the Guangdong-Hong Kong-Macao Greater Bay Area is helping Guangzhou become an important location choice for enterprises, supported by its advantages in transportation, industrial base, talent pool, and policy support. In turn, enterprises will support demand for R&D, industrial, office and other property classes.
The oversupply of Grade A office space in Shenzhen is expected to continue in the next few years. The reinvigoration of leasing demand largely depends on improvements in the economic outlook.
Looking ahead, we believe the latest quarantine policy and further relaxation of borders could help to facilitate business travelers, although it may not necessarily result in an immediate rental recovery in the near term or into 2023.