MANILA remained in third place affordable city for first class office rental prices in Asia-PaciFic region in the third quarter, according to real estate consultancy Knight Frank.
On an annual basis, occupancy costs in Manila fell 1.7%, slightly less than the region’s average decline of 2.5%, a Knight Frank Asia report published on October 22 showed.
The average prime offIce costs in Manila were $29.64 per square foot (sq.ft) during July to September.
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“Top rents in the region fell by just 0.1% quarter-on-quarter, signaling that rents could bottom out, supported by growth in Indian markets,” Knight Frank said.
Kuala Lumpur had the lowest average rent for prime offices in the region at $20.57 per square meter, followed by Jakarta at ($26.75), Phnom Penh ($34.13), Guangzhou ($35.60) and Bengaluru ($36 ,17).
The most expensive rents for prime office space were in Hong Kong SAR ($155.52), followed by Singapore ($125.66) and Sydney ($99.75).
Knight Frank expects rental prices to fall in Manila over the next twelve months, as they do in Bangkok, Beijing, Guangzhou, Hong Kong, Shenzhen and Shanghai.
Cities set to see higher rental prices over the next twelve months include Brisbane, Perth, Ho Chi Minh City, Singapore, Taipei, Seoul and Sydney.
The average prime offIce cream vacancies in the Asia-Pacific region fell 0.2% quarter-on-quarter to 14.8% in the third quarter, ending consecutive quarterly increases since the second quarter of 2022.
Manila had the 11e highest vacancy rate of first-class offices in the region: 14%. Kuala Lumpur had the highest figure at 27%, followed by Shenzhen (25.1%), Jakarta (24.9%), Bangkok (24%) and Shanghai (21.1%).
Knight Frank said businesses across the region are keeping a close eye on costs amid slower economic growth and geopolitical risks. The report noted that leasing sentiment is likely to take a hit as companies scale back spending.
“Global economic uncertainties have led to more cautious investment strategies among occupiers, driving innovation and consolidating office footprints,” said Tim Armstrong, Global Head of Occupier Strategy and Solutions.
Companies moving their offices are typically opting for smaller spaces, “in line with cost containment needs and the growing adoption of hybrid working models,” he added.
“While business sentiment may improve as the Fed eases monetary policy, demand will remain dampened by prudent spending and workplace strategies aimed at maximizing space use,” Mr. Armstrong said.
Knight Frank said that the Asia-Pacific prime offThe ice cream sector will still be ‘tenant favorable’ this year. With the completion of approximately 12 million square meters this year, the supply of pipelines is likely to decrease by approximately one percent next year.Fas.
“However, as the region’s development peak subsides, any significant increase in leasing activity could quickly reduce the availability of prime spaces. This scenario could accelerate development Ftrend from light to quality as tenants look to upgrade their portfolios in a potentially more competitive market,” said Mr Armstrong. — Aubrey Rose A. Inosante