Prime Benchmark

 

January 2015

 
  • With a strengthening economic outlook and expectations of rising interest rates, the US Dollar appreciated against most Asian currencies by between 1% and 18% during the second half of 2014. This is reflected in the rental values of commercial buildings in Asia which have become relatively less costly in US dollar terms. However, a mild currency appreciation has been experienced in China, recording a 0.5% rise against the US dollar, compared with the first half of 2014.
  • In local terms, office rental markets recorded growth from 0.5% to 5.0% across most cities in the second half of the year suggesting reasonably sound occupier demand, with China showing a more mixed picture, as rental markets declined in Shanghai and Guangzhou, while Shenzhen indicated a slow growth. Because of low office vacancy in Makati and tightening supply in Singapore, prime buildings in these markets have seen high rates of rental growth. (It should be noted that the newly completed FarGlory Financial Centre has been added to our basket of prime office properties in Taiwan resulting in a higher average rent)
  • A majority of retail markets are recording slower or no growth from 0% to 5%. This may suggest that the sector is approaching its peak in some cities.
  • Luxury apartment rents meanwhile are in a mild growth mode in most Asian cities, with the exception of Tokyo and Seoul which are showing stronger rental demand. Rental markets in Hong Kong, Singapore, and Guangzhou are still trending down and experiencing an apparent correction.
  • In the hotel sector, Manila has recorded high growth rates, followed by Ho Chi Minh City, Seoul, and Tokyo.
 
 

Key contacts

Simon Smith

Simon Smith

Senior Director
Research & Consultancy

kamaco Two Exchange Square

+852 2842 4573

 

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