Rethinking the Office Sector in Asia Pacific

FIGURE 3: MEDIAN AGE OF PRIME OFFICE STOCK (YEARS)

COMPARATIVELY YOUTHFUL BUSINESS DISTRICTS IN LINE WITH THE RAPID LEVELS OF EXPANSION SEEN ACROSS THE REGION, MANY OF THE REGION’S OFFICE MARKETS ARE COMPARATIVELY YOUTHFUL. For example, the average age of Grade A (prime) stock across mainland China and India’s top cities is less than 10 years, that is half of these cities’ office stock were built since 2013 (Figure 3). In the U.S. less than 10% of existing stock were constructed over the same period. The implication here being that the majority of prime office stock should be relevant to the market. However, there is a caveat. While Beijing and Shanghai have youthful prime stock, this only accounts for 30% and 55% of each city’s total office market respectively compared to over 70% in Melbourne and Mumbai, meaning that there is a large amount of secondary stock across both cities (Figure 4). Further pressure will be placed on this secondary stock as these cities continue to expand given their strong supply pipelines.

Source: Cushman & Wakefield

FIGURE 4: PROPORTION OF STOCK BY GRADE

Source: Cushman & Wakefield

READY TO RETHINK YOUR ASSETS? CONTACT OUR RETHINKING TEAM NOW

17

RETHINKING THE OFFICE SECTOR | OPTIMISING YOUR ASSET FOR A NEW ERA | ASIA PACIFIC 18