Office Leasing

"With high vaccination rates and the plummet in COVID-19 cases, the softening sentiment seen in the market over this year seems manageable. Like Tokyo, prime assets remain mostly occupied and have seen few corrections in rent, while buildings with poor access are suffering, resulting in the overall deterioration of market rents and vacancy. However, each region’s fundamentals and prospects look different."

"Rents for well-located and newer offices are likely to remain stable while older offices with poor accessibility will struggle. This trend is expected to continue to soften the overall market as a result, although there are some signs of recovery."

"Rental declines were milder in Kowloon with vacancy gradually absorbed after the aggressive rental adjustments of late last year. "

"The Office sector has proven to be resilient through the pandemic. Capital values have remained unchanged the last 12 months, a reflection of how Australia handled the COVID-19 pandemic generally, which ultimately increased investor confidence in the office sector."

"Non-prime areas have led the overall market contraction this quarter despite the continued stability of prime assets. Even so, with hopes that the expedited vaccine rollout will fuel the recovery in corporate performance later this year, things should look brighter for the offi ce market. Furthermore, limited supply until late 2022 will provide some breathing space."

"Rental declines are expected to be mild over the remainder of 2021 before the supply challenges of 2022 and 2023. "