Prime Benchmark

 

January 2016

 
  • With an uncertain economic outlook and a deteriorating external sector, most of the Asian central banks have maintained low policy rates and weak currencies to boost their real economies and exports. The market impact of the one-off RMB devaluation announced by the PBOC in August 2015 and the Fed’s decision to raise rates at the end of 2015 have induced a new round of currency depreciation in the region. Except for Japan, which saw a slight currency appreciation, almost all Asian currencies depreciated against the US Dollar by between 1.0% and 13.4% over the second half of 2015.
  • In terms of local currency, office rental markets recorded movements from -11.4% to 9.5% across the cities we monitor, with low rental growth recorded in 13 of the surveyed cities (0% to 3.6%) suggesting a sluggish office absorption rate in the second half of the year. Because of tightening supply in Hong Kong and strong demand in Manila, prime buildings in these markets saw higher rental growth than the average.
  • Rents in prime retail malls remained stable, growing by between 0% and 3% in most cities. With slowing domestic consumption, cities in Greater China seem to be near to reaching the peak of the property cycle.
  • Luxury apartment rents maintained steady growth in most Asian cities, with the exception of Manila and Shenzhen which are showing stronger rental demand. Rental markets in Guangzhou and Taipei are experiencing an apparent correction. Solid rental growth in the luxury serviced apartment sector was also noted in Shenzhen.
  • In the hotel sector, Singapore and Manila have recorded high growth in room rates, followed by Ho Chi Minh City, Shenzhen, and Shanghai.
 
 

Key contacts

Simon Smith

Simon Smith

Senior Director
Research & Consultancy

kamaco Two Exchange Square

+852 2842 4573

 

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