OFFICE RENTAL TRENDS Asia – Office rents in Jakarta have climbed faster than all other Asia Pacific cities in the last quarter, thanks to aggressive corporate expansion in the past year.
From the first to fourth quarter of 2011, the city recorded the strongest increase in average rents in the region, with a 7.9% increase within the same period. This was due to the rapid expansion of tenants capitalising on domestic economic growth, according to a report by real estate services firm Jones Lang LaSalle.
Todd Lauchlan, country head for Jones Lang LaSalle Indonesia, said the demand in the Jakarta office market - both in the central business district (CBD) and non-CBD areas - continued to be robust in the first quarter this year.
"This has confirmed a trend that we have seen through all of 2011, which has put significant pressure on the available supply within high quality or premium projects, with numerous buildings now nearly 100 per cent occupied," he said.
Out of the 27 Asia-Pacific cities surveyed in the first quarter this year, 13 cities showed growth in rent from the previous quarter while 11 cities recorded declines. Prices remained stagnant in the remaining three cities.
Beijing followed Jakarta with a 5.3% increase in average rents. On the other hand, rents in Hong Kong and Singapore declined 5% and 6% respectively as landlords lowered asking prices "in view of an ongoing contraction in the financial sector". There had also been a trend of firms moving outside those cities' central business districts.
"Continuing global economic uncertainties, particularly in the Eurozone, [has] impacted corporate hiring and office leasing demand in the Asia Pacific in the first few months of 2012," Jane Murray, head of Asia-Pacific research at Jones Lang LaSalle, said.
While Murray believes most countries in the region will likely see a moderate economic slowdown, she expects Asia Pacific economies to grow "significantly faster" than the rest of the world this year. This should result in a similar slowdown in aggregate leasing volumes during 2012, following a record year for take-up of space across the Asia Pacific in 2011.
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