An uncertain global economic outlook is likely to weaken demand for commercial property and bring down rent in export-oriented Asian economies, according to an industry report released yesterday.
"With some exceptions, demand-side weakness persists for commercial real estate throughout much of Asia Pacific," said Tim Bellman, regional head of research with property consultant Jones Lang Lasalle.
"This resulted in stable or declining rents in most commercial office markets in most cities in the second quarter."
In its quarterly Asia Pacific Property Digest, the property firm said demand was healthier in economies with a firm domestic consumption base.
"This suggests demand will be stronger in cities in China, Korea, India and Australia in the near term," Bellman said.
In Shanghai, the vacancy rate in the second quarter fell 4.4 percent from a year ago, and in Seoul it grew 2.2 percent on the year.
Australia's biggest city Sydney had a vacancy rate rise of 1.4 percent from a year ago, while Bombay was 3.6 percent up from the same period in 2001.
Singapore, whose economy is heavily dependent on trade, saw the biggest increment in commercial vacancy among the 15 cities covered in the report, with the vacancy rate up 4.7 percent.
In Hong Kong, the vacancy rate climbed up 3.1 percent, in the Malaysian capital Kuala Lumpur it was up 1.6 percent, and in Tokyo the rate increased 3.4 percent.
Prime office rental costs in central Hong Kong were down 27.9 percent year-on-year in the second quarter.
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