THE Philippine office property sector was among the markets in Asia Pacific that posted increased leasing volumes in the first half of this year, a global real estate services firm said.
In a report, Jones Lang Lasalle said office leasing volumes in Manila grew 42 percent in the first half of this year, registering the second highest leasing volume in the region.
“Manila continues to be a favored location for BPO [business process outsourcing]with H1 volumes up 42 percent year-on-year,” JLL said.
Tokyo posted the highest leasing volume in the first half with a 93 percent year-on-year increase, driven by big-ticket pre-commitments during the period.
Hong Kong’s leasing volumes grew 41 percent while Singapore posted growth driven by a number of pre-commitments and take-up in newer buildings.
In contrast, some large economies in the Asia Pacific region saw their leasing volumes decline, particularly China and India.
JLL noted that office leasing volumes in most Asia Pacific property markets were down in the first six months of the year.
“Gross leasing volumes during H1 2016 were down by 4 percent year-on-year, largely due to a weakening of demand in China and India’s Tier 1 cities,” the report said.
Leasing volumes in Shanghai and Beijing dropped by 40-50 percent during the first half of the year partly due to lower supply, while India’s leasing volumes also declined.
“India’s leasing volumes declined by 20 percent year-on-year in H1, to some extent due to a lack of available space in Bangalore (H1 volumes were down 36 percent on last year) but also because of a slowdown in demand from e-commerce firms,” the report said.
Leasing volumes in Australia also fell by 5 percent in the first six months of the year.
JLL has downgraded its leasing volume forecast for the year given the decline in many parts of the Asia Pacific.
“Given the year-to-date result for leasing volumes and the increased economic uncertainties both in the region and globally, the full-year 2016 forecast has been revised down to 0 percent-5 percent growth (from 10 percent-15 percent in April 2016),” JLL said.
JLL said it expects 2016 global leasing volumes to be 5 percent lower than last year’s.
“Our latest projection for the full-year 2016 indicates that global leasing volumes will be about 5 percent lower than the peak of 40.9 million square meters in 2015” amid weaker business sentiment, economic uncertainty and continued political risks, it said.
“This is not a poor result, however at around 39 million square meters in 2016, volumes are still expected to be higher than at any time between 2008 and 2014,” JLL said.