Regardless of a cooling economy, the Knight Frank Asia-Pacific Prime Office Rental Index Q3 2019 has been released and it says prime office rentals have remained stable. 

The index rose 0.1 per cent quarter-on-quarter to 157.3.

Year-on-year the index has risen 1.8 per cent, decelerating from the 3.4 per cent rise witnessed in Q2.

Tim Armstrong, Head of Occupier Services and Commercial Agency, said of the 20 cities tracked by the index, 12 recorded either stable or increased quarterly rents; 3 less than the 14 reported in the previous period.

"As we head towards the end of 2019, we maintain our expectation for a softer result for the full year with the rental index expected to rise between 0 to 3 per cent, down from the 7.7 per cent witnessed last year," said Mr Armstrong.

At a Glance:

• Of the 20 cities tracked by the index, 12 recorded either stable or increased rents; two less than the 14 reported in the previous period. 
• Bengaluru outperformed with the highest rise at 8 per cent quarter-on-quarter, driven by a healthy 33 per cent year-on-year growth in H1 2019 in the IT industry. 
• Australian markets overall had a robust Q3 2019 underpinned by a steady economy, low unemployment, low interest rates, and continued demand for quality space and limited supply.

"Looking more closely at Australia, Perth registered a 2.3 per cent quarter-on-quarter growth, closely following Sydney’s 2.5 per cent. 

“Going into 2020, amidst trade tensions, cooling economies, social and political unrests, occupiers and landlords will continue to face mounting pressures that are likely to subdue growth prospects.” 

Teh Young Khean, Executive Director of Corporate Services at Knight Frank Malaysia, said Malaysia’s tallest tower and the capital city’s latest iconic skyscraper, The Exchange 106 @ Tun Razak Exchange (TRX), was awarded the Certificate of Completion and Compliance (CCC) for the lower zone of the building in Q3 2019.

"The building, which is reported to have achieved circa 20 per cent precommitted occupancy, offers good quality and high specification space and hence, commands higher
rental rates," said Mr Khean. 

“Going forward, however, with the Kuala Lumpur City Centre’s office market remaining competitive amid high impending supply, landlords continue to offer attractive leasing packages to secure new occupiers and retain existing tenants.”

The report can be read here.

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