Asia Pacific office rents growing more slowly due to 'global economic headwinds': CBRE
“Global economic headwinds” have slowed the growth of rents and capital values of offices in the Asia Pacific region in the third quarter of 2011, according to CBRE’s global chief economist.
The Asia Pacific Office Rent Index, which measures office rent, rose 12.9% year-over-year, “reflecting a continued strong rebound from the global recession,” says CBRE global chief economist Robert McGrath.
But there was just a 2.2% increase for the third quarter, “indicating that even in the region with the strongest growth, the recovery has moderated”.
It was the same story with the Asia Pacific Capital Value Index, which measures office capital, which increased 1.1% for the quarter 16.5% year on year.
“[The] quarterly increase was well below the average quarterly growth of 3.7% since Q3 2009,” McGrath writes.
However, Asia Pacific fared better than the rest of the world. The global quarterly growth of office rent was just 0.9% with a year-on-year increase of 5.1% while the average quarterly growth of office capital was 1.1% with a year-on-year increase of 10.7%.
“Although both rents and capital values continued to rise, quarterly growth rates lost momentum,” says CBRE global chief economist Raymond Torto.
“Even in Asia – which continues to propel both indices higher – activity slowed due to global economic headwinds.”
America fared poorly in Office Rent Index, with a year-on-year increase of just 1.5% and a stunted quarterly growth of 0.4%.
“Although the Americas Rent Index reached its trough in Q2 2010, Q3 2011 marks only the third quarter of notable rental growth, reflecting the lingering strains in the aftermath of the global financial crisis as well as the uncertainty arising from employment, consumer confidence and debt-related challenges,” says McGrath.
Despite Its feeble rent performance, the Office Capital Value Index for America was stronger, with quarterly growth increasing 1.5% and a year-on-year growth of 10.5%.
“[The increases demonstrate] that investor demand remains strong despite economic uncertainty,” says McGrath.