Market Outlook

In this edition of The Reimagined Workplace Q&A series, we collaborate with Patrick McCreery, Global Head of Commercial and GM for Southeast Asia at Keppel Data Centres, to focus on disaster recovery - also known as business continuity planning - and discuss how the work 'place', 'space' and 'pace' are evolving within the data centres sector, as well as the opportunities for both occupiers and asset owners, going forward.

Q&A Highlights:

• How has occupier demand for disaster recovery changed in the past 12 months?
• How is cloud adoption transforming occupiers and why are operators following suit?
• What are the long-term outlook for disaster recovery and demand, and the opportunities in this space?
• How do data centres support business continuity planning and the disaster recovery business?

The Asia Pacific office demand declined from 103 million sf in 2019 to 53 million sf in 2020 as occupiers sought to limit cost exposures during the COVID-19 pandemic.
In line with this decline in demand, vacancy has increased, and rents have softened across most markets, pushing them towards greater tenant-friendly status and providing occupiers with a window of opportunity in negotiating any forthcoming lease commitments.

However, corporate occupiers need to be aware that these changes may not bring the cost savings that they might expect – some markets may see tenants having to pay more on a new lease than they were paying on the last year of an expiring lease.

In our Asia Pacific Office Rental Variability Index we take a closer look at:

• The current state of play in 36 key office cities across Asia Pacific
• The extent of, and variability in, rental change over the duration of average lease terms at the city level
• Strategies that occupiers might wish to explore to help navigate the impacts of this rent variability
  

The COVID-19 pandemic caused a high degree of uncertainty across the Queensland economy and the commercial property market. However, the Industrial and Logistics sector (I&L) has been the clear winner particularly as e-commerce penetration accelerated over the past 18 months and is one of the key drivers of demand for floorspace. Investors have responded by seeking to increase their exposure to the sector, and now investment sale volumes in Queensland was the highest on record in 2020.

This report will detail some the key trends driving the Brisbane industrial and logistics market, and provides greater insights on the supply and take-up of industrial land.

• Commercial real estate investment momentum accelerated in Q2 2021 as the economy continued to pick up along with the commencement of the city’s vaccination programme.

• Property funds collectively deployed HK$5.4 billion, 21% of the quarter’s total, with all acquisitions involving industrial assets.

• Hong Kong’s economic recovery, improved prospects of a border reopening with mainland China, and low financing costs will ensure the investment market remains upbeat in H2 2021.