Market Outlook

Asia Pacific Economy

Outlook bright but headwinds grow

The region's economy remains resilient in the face of new challenges with 2017's momentum carrying on. Economic sentiment is favourable with data releases pointing to a continued healthy performance despite equity market instability and ramping up of protectionist rhetoric. 

Although trade tensions have dominated headlines in the early part of the year, as the US looks to impose new tariffs on imports, most economists still believe that the probability of a full-blown trad war is low at this time.

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In Q1 2018, the average Grade-A office rent dropped to RMB9.6 per sqm per day (see Table 1).

Due to weak leasing demand and the huge amount of new supply, the overall Grade-A office vacancy rate increased 1.8 percentage points to 6.1% quarter on quarter (Q-o-Q) (see Table 1).

With the departure of some major tenants...

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The year gone by saw Residential Real Estate writing a new chapter in the history of evolution post critical regulatory reforms introduced in the previous years. Sales across key seven cities in 2018 were 42% higher vis-à-vis 2017 and launches grew by 53% compared to 2017. 

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While the region’s economy has faced some headwinds in 2018, the majority of real estate markets remain dynamic with investors and occupiers both continuing to be active. Heading into 2019, cooling measures, rising interest rates and slowing sentiment is likely to weigh on residential markets, while trade tensions could influence decision making for corporates looking at office space. Structural changes are also likely to continue as co-working and coliving become more commonplace across the APAC markets.

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