Thought Leadership

Knight Frank's Asia-Pacific Prime Office Rental Index saw a 0.3% quarter-on-quarter increase, the first uptick since Q3 2019, before the start of the pandemic. Overall vacancy remains elevated at 12.8%, but office rents are likely to have bottomed out, thanks to improving business sentiments and a gradual and more sustainable return to workplaces, especially among big tech occupiers taking advantage of lower rents to move into high-quality CBD office spaces.

While conditions remain tentative due to the Omicron variant, we expect rents to continue stabilising into 2022 with more markets in the region reaching an inflexion point in the rental downcycle. As occupiers continually evolve their space strategies on the adoption of hybrid working styles, 2022 will be a year of reset and experimentation. However, this does not mean less demand for office spaces. We expect leasing activity to strengthen into 2022, with demand underpinned by the integration of flexible space solutions and a pivot to quality spaces that emphasises wellness and employee experience.

This article was originally published in https://www.knightfrank.com/

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Overall office gross absorption across the top six cities was at about 33 million sq feet, 10% higher compared to 2020. Pan-India absorption during the year surpassed the annual gross absorption during 2016-2018 by 7%, signalling a strong revival in occupier confidence.

This article was originally published in https://www.colliers.com/en-in

• In a year where a raft of measures were unleashed to contain the rate of infections as well as activity in the red-hot residential market, some S$7.3 billion of investment deals were recorded in Q4 2021, bringing the total for the whole year to S$25.8 billion. This reflected a growth of 5.3% from the total amount of S$24.5 billion last year.
• The investment volume in Q4 was primarily led by residential sales, amounting to about S$2.8 billion, as demand remained healthy for prime residential homes. This included the sale of a penthouse unit at Les Maisons Nassim for S$75 million (S$6,201 psf) in late October, as well as a Good Class Bungalow (GCB) within the Kilburn Estate GCB Area (GCBA) where it was reported that crypto billionaire Zhu Su was in the process of acquiring the detached house at S$48.8 million (S$1,532 psf on land).
• The collective sale market also started to gain momentum in Q4 2021, comprising five en bloc deals that were sealed from October to December. This included the sale of Peace Centre and Peace Mansion topping the list at S$650 million, acquired by a joint venture (JV) of CEL Development, Sing-Haiyi Crystal and Ultra Infinity. Watten Estate Condominium was sold for S$550.8 million to a UOL-SingLand JV. Despite the encouraging en bloc activity with homeowners of ageing projects growing increasingly hopeful, the imposition of cooling measures on 15 December 2021 has given pause to the market. In addition to the risks of escalating construction costs, developers also have to contend with pressure stemming from the increased Additional Buyers’ Stamp Duty (ABSD) rate for entities from 25% to 35%.

This article was originally published in https://www.knightfrank.com/