Hong Kong, 7 January 2016 -
2016 promises to be a boom year for office occupiers with plenty of fresh supply hitting the market, according to forecasts by Colliers International. This will provide occupiers with lots of options for expansion as well as consolidation as as they continue to intensify their push to differentiate between client-facing front-office locations and decentralised back-office space.
“Multinational occupiers will continue to focus on keeping costs in check,” Sam Harvey-Jones, managing director of occupier services, Asia, says. “This requires carefully balancing cost management and space efficiency when making leasing decisions.They will have plenty of options. There is 110 million sq ft of new Grade A office space due for completion in 2016, on top of the 100 million sq ft of additional space that was earmarked for completion in 2015.”
Colliers estimates that 70% of the new space will be in India and China alone, and vacancies will push into double digits in the tier 1 Chinese cities of Shanghai, Shenzhen and Guangzhou. But similar vacancy rates will also occur in Chengdu, and in the prime Indian markets: Delhi, Mumbai, Chennai and Bengalaru. Truly prime space will however, remain at a premium in the core of these cities. Much of the new space will be in decentralised locations which are more fitting for back offices.
Trends in the technology sector are also reshaping the occupier market across Asia, and Colliers envisages tech firms aggressively growing and looking for premium quality space. Cross-border e-commerce will be the “hottest ticket in town” in 2016, with China and India the key growth locations.
Offshoring and business process outsourcing have resulted in rapidly increasing demand for custom space for those purposes in India and, increasingly, the Philippines. In 2016, Colliers anticipates that India will differentiate itself by targetting outsourced software development in particular. The Philippines has succeeded in positioning itself as the dominant supplier of call centers thanks to an exceedingly high national English-proficiency rating of 92.5%.
For more results from Colliers International’s Asia Property Outlook 2016 report, please visit http://www.colliers.com/en-gb/asia/realestate2016.