Asia Pacific Office Rental Growth Slowed to 0.4% in 2Q 2011
Further slowdown expected amidst rising interest rates

August 17, 2011, Bangkok – According to Colliers International’s Asia Pacific Office Market Overview 2Q 2011, the average office rental in the region slowed distinctively from 1.7% quarter-on-quarter (QoQ) in 1Q 2011 to 0.4% in 2Q 2011. 

In the office leasing market, individual cities in South Asia registered notable rental declines in 2Q 2011, however Beijing, Hong Kong and Singapore continued to perform in the region.

On the sales front, buying momentum varied across numerous sub-regions during 2Q 2011.  In China, the volume of sales transactions in Beijing was relatively quiet compared to 1Q 2011, while the other cities saw firm demand but limited quality stock available for sale.  In the Australasian sub-region, the volume of the investment sales market was generally quiet.  Hong Kong on the other hand, bucked the trend with a double-digit increase in sales volume during 2Q 2011, thanks to the active strata-title sales in non-core markets.

The situation in Bangkok remained stable but limited in dynamics due to no new supply being added in Q2 as well as very tepid activity on the part of tenants due to continued uncertainty in the run up to the general election on July 3rd. A majority government may lead to greater confidence and a subsequent increase in office relocation over the rest of the year. However an influx of new supply in 2H 2011 will keep rentals and occupancy on an even keel. However, according to Patima Jeerapaet, Managing Director of Colliers International Thailand, the long term outlook could be positive. "Future stability and the lead up to the ASEAN Economic Area in 2015 could be just the tonic the office market needs after some years of relative sluggishness", he said.

Amidst rising interest rate in the region, the overall office market momentum is anticipated to stage further slowdown, and individual markets with the prevailing tight credit conditions may experience a more significant slowdown in the volume of office sales transactions.  Despite these challenges, the outlook for opportunities in Asia Pacific continues to be positive.
 
“As financial institutions in the region tighten their reins on lending, market sentiment is expected to temper and transaction volume reduced.  However, many firms believe in the potential of Asia and continue to implement expansion and upgrading plans,” said Mark Lampard, Managing Director of Corporate Solutions, Asia Pacific at Colliers International.

About Colliers International
Colliers International is a global leader in real estate services with more than 12,500 professionals operating out of 512 offices in 61 countries.  As a subsidiary of FirstService Corporation (NASDAQ: FSRV; TSX: FSV and FSV.PR.U), Colliers offers the stability of a strong financial partner and significant local ownership providing clients with accountability and enterprising real estate solutions. Colliers provides a full range of services to real estate users, owners and investors worldwide including: global corporate solutions; sales and lease brokerage; property and asset management; project management; hotel investment sales and consulting; property valuation and appraisal services; mortgage banking and insightful research. The Lipsey Company and National Real Estate Investor magazine ranked Colliers International as the world’s number two commercial real estate brand.

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