Prime Commercial Property Market In Asia Pacific Remained Healthy
According to a property consultancy firm, the Asia Pacific prime commercial property market remained healthy, particularly in terms of rents and investment sales. This is despite the weaker growth prospect in the Asia Pacific economy resulting from China’s slower economic growth and the likely tapering of QE3 in the United States.
The firm noted that in the first half of 2013, office rents in Singapore, Seoul, Kuala Lumpur and Ho Chi Minh City remained steady and are expected to be at the bottom of the rental cycle. Over the same period, office rents in Bangkok and Jakarta recorded strong growth, while prime office rents in China, particularly in large cities like Beijing, Guangzhou and Shanghai, recorded declines.
Overall, the firm’s Asia Pacific Prime Office Index grew 1.3 per cent in the first six months of 2013 compared to the same period last year. However, the index decreased by 0.1 per cent quarter-on-quarter in 2Q 2013, its first decline in 14 quarters.
Meanwhile, strong retail sales supported by the growing middle class in Asia Pacific contributed to the growth in retail rents. Notably, prime retail rents in Singapore rose 2 per cent in the first half of 2013. However, the firm expects the growth in retail rents in Singapore to moderate, indicating that rents may be close to peak level.
The first half of 2013 also saw the closure of US$57.9 billion (S$73.4 billion) worth of investment sales involving commercial properties in the Asia Pacific region. Although this is 1.8 per cent lower compared to the value of transactions in 1H 2012, it is 9.6 per cent higher compared to 2H 2012.