Rethinking the Office Sector in Asia Pacific

ONGOING OFFICE EMPLOYMENT GROWTH

ASIA PACIFIC HAS MAINTAINED ROBUST OFFICE DEMAND DYNAMICS THROUGHOUT THE COVID-19 PANDEMIC, BEING THE ONLY REGION TO CONSISTENTLY POST POSITIVE QUARTERLY NET ABSORPTION RESULTS EACH QUARTER SINCE ITS ONSET.

OFFICE EMPLOYMENT GROWTH

As at Q1 2023, 180 million square feet (msf) more office space is occupied compared to Q4 2019 2 . Furthermore the future looks positive, with forecast demand to average 74 msf per annum through to 2025. This is in no small part due to robust jobs growth across the region. At the regional level, almost 15 million new office jobs are forecast to be created by 2030 , of which 4.5 million will be created by the end of 2025 and the remaining 10.2 million from 2025 to 2030. This bodes well for the future, but office employment growth is heavily concentrated across three key markets – mainland China, India and the Philippines (Figure 1). Together these three markets account for 80% of the region’s office employment growth through to 2030, with mainland China accounting for the majority at 50% or 7.4 million jobs. Of course, this means limited jobs growth across the remainder of the region (3.1 million jobs) with markets such as Hong Kong, Singapore and Korea remaining broadly flat or even moderately shrinking. Consequently, there will be considerable variation in office demand dynamics between markets with emerging markets continuing to expand, while mature markets are more likely to experience some form of demand churn. Ultimately this means the continued need for more stock in expansionary markets, while mature markets broadly have sufficient stock but need to focus more on quality improvement.

At the regional level, almost 15 million new office jobs are forecast to be created by 2030.

FIGURE 1: FORECAST OFFICE EMPLOYMENT GROWTH (MILLIONS), 2022-2030

2 Across the region’s top 25 cities.

Source: Moody’s Analytics

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