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News Release

Hong Kong and Macau

Companies need to act now to take advantage of real estate opportunities in Asia Pacific

Jones Lang LaSalle webinar identifies key economic and property market trends impacting corporate real estate in Asia Pacific

As business confidence returns across the globe and the financial seat of capital begins to move from London and New York to Hong Kong and Shanghai, companies are turning their eyes toward Asia Pacific for growth and expansion.

At a webinar held recently, entitled “Timing is Everything – Finding Opportunities in a Recovery”, Jeremy Sheldon, Managing Director of Jones Lang LaSalle’s Markets team in Asia Pacific, said that it is within this region where the cost of doing business is lower that companies are seeing an opportunity to invest at the bottom of the market.

“Companies are looking for growth, and the only place where you are going to get double-digit growth right now is in Asia Pacific,” said Sheldon.

He adds that there is still reason to be cautious as Asia Pacific may yet be impacted by shifts in global demand for goods and services.

In addition, the growth trajectory being seen in some parts of the region does not necessarily mean that the window of opportunity for companies to secure space on attractive terms has shut.

“There are still great opportunities for companies to take advantage of supply-and-demand imbalances in the market—if they know where to look for them,” said Sheldon.

Trends to look out for in key markets include the following:
  • Seoul is anticipating a record-high new supply pipeline, with total office stock set to increase by 30% by 2013. The best deals are currently within new developments, and with international landlords entering the market, there will be opportunities for companies to move into new purpose-built Grade A office buildings for the first time.
  • In India, there are many opportunities to be found outside the traditional locations of Mumbai and Delhi. Markets in the “BCH triangle” – Bangalore, Chennai, and Hyderabad – are stabilizing with significant investment in infrastructure and multiple drivers of business growth. There are some supply-and-demand imbalances that will offer great opportunities to secure space in some of the most flexible real estate markets in the world.
  • In Shanghai, we are seeing a “tale of two centers”. There is a huge amount of supply coming on line, and yet the market is going up. This is because the 30,000-sqm pipeline in Pudong is largely pre-committed. The best opportunities are to be found in Puxi, where the 500,000-sqm pipeline is expected to result in higher vacancies.
  • In Singapore, the market has stabilized and is slowly turning around. Following a “flight to quality” during the downturn, Grade A office space is in short supply. However, there are still fantastic opportunities to be found in Grade B space and suburban markets.
  • In Tokyo, where the market appears to be taking longer to stabilize, the rate of rental decline is beginning to slow down. Unlike other markets, future supply is also limited when compared to the last five years; hence, now really is the time to take advantage of tenant-favorable market conditions before rents hit bottom.
  • In Hong Kong, with small financial organizations doubling in size and mainland China banks soaking up space in an already tight market, rents are climbing. For companies that need to be in Hong Kong but do not need to be in the heart of the CBD, Hong Kong East still offers relatively affordable, good-quality space.

“One lesson learned from the economic crisis is that nimble organizations are better positioned to survive economic and business challenges,” said Sheldon. “Companies that have not yet taken action to optimize their portfolio may have missed the market in a couple of locations, but there are still opportunities to be found for those that are informed and act swiftly.”

A copy of the webinar recording will be made available on our website on Monday, 5th July 2010: