Prime office rental index in Asia-Pac dipped 0.7% in 2Q14

Didn't the drop in vacancy rate help?.

Knight Frank Asia Pacific has recently launched the Asia-Pacific Prime Office Rental Index for Q2 2014, with the index declining 0.7% in the second quarter of 2014, despite a 0.3% drop in the regional vacancy rate.

According to a release from Knight Frank, Mr. Nicholas Holt, Head of Research for Asia Pacific, says, “Q2 2014 registered little rent movement, demonstrating less volatility than the previous quarter.

10 markets, out of the 20 markets tracked, this quarter saw less than 0.5% rental movement, compared to six markets in the previous quarter.

Only three markets – Phnom Penh, Sydney and Singapore – saw more than 0.5% rental growth in Q2 2014 despite significant increase in net absorption and a decline in vacancy rates.”

Here’s more from Knight Frank:

Ms Alice Tan, Director & Head of Consultancy and Research for Knight Frank Singapore, says, "Singapore's office leasing activity is picking up momentum especially for the first half this year, as more enterprises are looking to relocate to better quality offices.

Rentals for prime office spaces are likely to exhibit at least 10 per cent annual growth by end of this year."

Results for Q2 2014: Out of the 20 markets tracked, eight of the prime office markets tracked saw prime rents soften in Q2 2014, with eight equally seeing rental growth; four markets recorded no rental movement.

Phnom Penh registered the highest growth at 3.8% whilst Hanoi saw the largest decline at -4.1%.

Over the next 12 months, we expect rents in 14 cities out of the 20 tracked to either remain steady or increase, which is in line with the previous forecasts.