Prime Benchmark

 

July 2014

 
  • With a generally stable economic outlook, Asian currencies have appreciated mildly between 1% and 4% during the first half of 2014. However, currency devaluation has been experienced in China and Vietnam, recording a 0.9% and 1.0% local depreciation against the US dollar respectively, compared with the end of 2013. The Japanese government increased the consumption tax rate from 5% to 8% in April 2014, which is reflected in office and retail occupancy costs in Tokyo and Osaka.
  • In local terms, office rental markets recorded growth from 1.6% to 5.0% across most cities in the first half of the year. China is showing a more mixed picture, with rental markets declining in Shanghai due to supply concerns, while strong office demand was noted in Shenzhen.
  • A majority of retail markets are recording slower growth in a late up-cycle. The implications may suggest that sectors are approaching their peak in most cities (it is noted that the newly remodeled COEX mall has been added to our basket of prime retail properties in Seoul resulting in a higher average rent). Rising middle-class incomes are the main driver of consumer spending, which in turn is boosting demand for retail space in Manila.
  • Luxury apartment rents are showing mild growth in some Asian cities. Rental markets in Hong Kong, Singapore, and Shenzhen are experiencing a downtrend and seeing an apparent correction. Strong rental growth in the luxury serviced apartment sector was also noted in Manila.
  • In the hotel sector, Guangzhou and Osaka have both recorded high growth rates, followed by Singapore, Tokyo, and Taipei.
 
 

Key contacts

Simon Smith

Simon Smith

Senior Director
Research & Consultancy

kamaco Two Exchange Square

+852 2842 4573

 

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