As economies reopen and employees continue their return to the office, demand for office space for the full year in 2021 is expected to be 77% above 2020 levels in Asia Pacific, despite much of the region re-entering prolonged lockdowns as the Delta variant emerged. How is this possible when we anticipated a mass exodus from CBDs, and fully flexible work models in place?
However, we can’t just look to increased ‘return to work’ demand to justify the increase. 2020 figures were obviously at a near historical low and coupled with the overall growth protectory of specific regions, as well as new companies entering the market, an increase was inevitable despite changing work behaviours.
While there is generally a universal desire to work more flexibly post-pandemic, significant variations exist across the region.
At one end of the spectrum, employees in Mainland China and India still spend most of their worktime in the office, with mainland China experiencing record office demand in Tier 1 markets this year. Looking to 2022, demand is expected to increase further – reflective of a stronger recovery across the entire region – before returning to pre-pandemic levels in 2023.
Not everywhere is seeing such high demand. More moderate growth is expected in Australia, where there is greater desire to adopt a hybrid work model as seen in the U.S. and many parts of Europe, with some occupiers consolidating their office premises by 20%.
Market dynamics, as opposed to workplace behaviours, are seeing demand more muted in Seoul due to tight vacancy, limited new supply and strong growth in the year to date. Likewise, Tokyo is forecast to experience comparatively muted positive office demand after recording negative demand of approximately 1.6msf in 2021.
Going into 2022 and beyond, it’s expected that any underlying drag on demand from remote working across the APAC region, will be more than offset by employment growth and the transition to a higher proportion of office-based employment.
