Kuala Lumpur, 12 September 2017 – Knight Frank, the independent global property consultancy, launches the Asia-Pacific Prime Office Rental Index for Q2 2017. The index increased 1.2% quarter-on-quarter and 0.6% year-on-year as at the end of the second quarter of 2017.
Results for Q2 2017
• The increase in the index was the result of rising rents in 15 of the markets over the quarter, with rental declines experienced in two (Bangkok and Kuala Lumpur) of the 20 markets tracked.
• Phnom Penh topped the chart this quarter at 4.2% increase quarter-on-quarter, compared to a flat performance in the last quarter. The completion of Exchange Square not only set a new benchmark standard for Grade-A office, but its strong pre-commitment level also boosted prime rental levels in the Cambodian capital.
• On the other hand, Bangkok, which topped the chart last quarter, is seeing its first decline this quarter in close to three years. Given limited supply however, a rising trend may resume for the remainder of 2017.
• Over the next 12 months, we expect rents in 15 cities out of the 20 tracked to either remain steady or increase, which is the same as our previous forecast.
Mr Nicholas Holt, Head of Research for Asia-Pacific, says, “The pickup in global trade and domestic demand has negated geo-political risks to a certain extent, thereby providing a strong foundation for the Asia-Pacific prime office markets.”
Mr Teh Young Khean, Executive Director of Corporate Services, Knight Frank Malaysia comments, “Kuala Lumpur has been experiencing rental decline for a year, coupled with creeping overall vacancy rates. However, we expect to see sustained demand in selected established and upcoming decentralized office locations served by the LRT and new MRT lines.”