The latest information and five-year forecast for 19 office markets across APAC.
- The aggregate APAC vacancy rate stood at 11.4% at end-Q2. We expect APAC vacancy to peak at 14.5% at end-2022, and to ease to 13.3% by end-2024.
- Supply should remain high in 2021 but ease thereafter, with demand and supply balanced by 2023.
- Weighted average APAC rent should fall 5.0% in 2020, while over five years we see an average annual rent decline of 0.7%. Popular occupier centres such as Singapore, Bangalore and Melbourne CBD should achieve higher rent growth, of 3.3%-2.5% on average over five years.
- Office markets with solid rent growth, e.g. Singapore, Bangalore, Melbourne CBD and Auckland, have the greatest potential for long-run capital appreciation.
- Singapore offers the highest average annual rent growth in APAC over five years (3.3%). Auckland offers the highest spread over ten-year government bonds (5.1pp).
- Despite a 48% YOY drop in aggregate APAC office investment sales in Q2 2020, capital values have yet to fall sharply, and yields are little changed. We expect modest yield softening over H2 and H1 2021 in some markets.
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