Investors & Developers

Office Rentals in Asia Pacific Rise in First Quarter of 2018

Office Rentals in Asia Pacific Rise in First Quarter of 2018

The office sector in Asia Pacific has seen an increase in rentals in the first quarter of 2018. Cushman & Wakefield’s Q1 2018 Asia Pacific Office MarketBeats showed that there has been an upward trend in Grade A office space rentals in most of the region’s markets.

Here’s an overview of the region’s office rental climate in the first quarter:


The overall Grade A Central Business District (CBD) rent rose by 2.0% to S$9.38 per square foot per month during 1Q2018, driven largely by Raffles Place where rents have increased by 3.3% to S$9.68 psf/mo. With vacancies in Grade A properties declining at a steady pace, rents are on track to attain a 10% increase in 2018. The rising CBD rents prompted some occupiers to consider decentralized locations.


Vacancy rate in Melbourne and Sydney CBD has hit 4.6%. This is the first time since 2008 that vacancy has been this low for both cities.

As a result, prime net effective rents in Melbourne have increased significantly, up 13% in year-on-year (YoY) terms to AU$418 per square meter per annum. In Sydney, prime net face rents passed AU$1,000 per sq m per annum for the first time, and incentives declined from 21% to 20%, supporting a gross effective rental increase of 2.9% over the quarter.


Asking rent for Grade A office space in Tokyo increased 1.6% YoY. This uptick is statistically due to the remaining smaller space with tight vacancy rates, which is offered with higher rents than bigger spaces.


Availability of space kept the overall rents for Delhi-NCR range-bound during the quarter. However, with limited availability and higher pre-leases, the Gurugram CBD is expected to record a 4-5% spurt in quoted rents over the next 3-6 months.

South Korea

A lack of new supply helped landlords in Seoul’s CBD gradually fill-up some empty space, with vacancy falling by 1 percentage point quarter-on-quarter (QoQ) to 10.9%. Landlords in this district were confident enough to raise their asking rents by a weighted average of 4.2% QoQ, significantly higher than the figures seen in the Gangnam Business District (GBD).


Average asking rents in Ho Chi Minh City have been on an upward trend over the last four years and continued to record on quarter and on year increases by nearly 1.0% and 9.0% respectively in Q1 2018, mainly driven by high rents commanded by recent new buildings as well as rental increases in existing buildings with limited available space for lease in the prime locations.


Although the office market in Kuala Lumpur remained competitive, the rentals have been relatively resilient as tenants are taking opportunities to relocate to higher-quality office buildings without having to pay higher rates.


The average asking rent in Metro Manila grew 8.6% YoY from PHP 803 per square meter per month to PHP 871 /sq. m./mo. in the first quarter of 2018. Non-CBD markets are showing the fastest rent growth with those of Pasay City and Muntinlupa City having the highest rental jump at 19.9% and 16.6% YoY, respectively.


Demand for office space in Bangkok remained strong as vacancy rates continued to tighten. Average monthly rent for CBD office space rose to THB76.74 per square foot (THB89.41 for Grade A and THB67.09 for Grade B), an increase of 5.49% YoY.

For the full data and outlook on the region’s office market in the first quarter, visit our MarketBeats portal.

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