Office rents in 14 Asian cities to either edge up or hold steady

There's no way but up.

Though Seoul has witnessed significant pressure from decentralization previously, the outcome in Q2 was quite different, because while empty spaces in the CBD have been quickly filled up by the private sector, the GBD saw its vacancy rate increase as IT firms moved out and consolidated their operations in the city fringe.

According to a research note from Knight Frank, on the whole, rents fell as the vacancy rate edged up.

Meanwhile, in India, the surge in business confidence resulting from the change in government has yet to translate into rental improvement, although net absorption in Bengaluru did soar 136.6% quarter-on-quarter in Q2 2014 due to robust demand stemming from the emergence of newer sectors besides the IT industry.

Here’s more from Knight Frank:

In Indonesia, businesses took a wait-and-see attitude before the July presidential election, as net absorption in Jakarta turned negative and rents fell.

In other Southeast Asian markets: higher asking rents at the newly opened Vattanac Tower and the higher average service charge lifted leasing costs in Phnom Penh; Bangkok, Kuala Lumpur and Ho Chi Minh office markets remained stable; and rents in Hanoi continued to slide as new supply exceeded take-up in Q2 2014.

Moving forward, we expect rents in 14 cities out of the 20 tracked to either remain steady or increase, which is in line with our previous forecasts.