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Asia Pacific office supply to surge
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OFFICE supply will surge in Asia Pacific as completion of buildings starts to peak in a number of gateway cities and emerging markets, according to latest research released by global property advisor DTZ/Cushman & Wakefield.
The total supply of new office space will rise to about 13 percent of the current inventory this year while construction will increase the overall supply in the 2016-17 period to 16 percent of the existing stock, the company predicted.
While emerging markets account for 60 percent of the completions, a number of gateway cities will also gain in office space.
Beijing and Shanghai, which are set to see over 618,700 square meters of new office space completed during the two-year period, will account for 71 percent of total anticipated completions among the region’s 12 core gateway cities.
“The substantial level of absorption witnessed last year in China’s core and emerging cities, mainly fuelled by the IT sector and financial services occupier, and the continued high level of absorption heading into 2016 is providing a greater level of comfort,” said Andrew Ness, head of research for China operations, as he addressed whether the surge in development can be supported by underlying demand.
Notably, a decentralizing trend — shifting toward new submarkets and expanded business districts from downtown locations — will continue to be seen in a number of cities across the region.
In Shanghai, 60 percent of the new supply will be located in emerging sub-markets which will create keen competition for tenants in these areas but make the city more cost competitive for corporate clients.
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