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Asia Pacific Economy

Outlook bright but headwinds grow

The region’s economy remains resilient in the face of new challenges with 2017’s momentum carrying on. Economic sentiment is favourable with data releases pointing to a continued healthy performance despite equity market instability and ramping up of protectionist rhetoric. 

Although trade tensions have dominated headlines in the early part of the year, as the US looks to impose new tariffs on imports, most economists still believe that the probability of a full-blown trad war is low at this time.

In Q1 2018, the average Grade-A office rent dropped to RMB9.6 per sqm per day (see Table 1).

Due to weak leasing demand and the huge amount of new supply, the overall Grade-A office vacancy rate increased 1.8 percentage points to 6.1% quarter on quarter (Q-o-Q) (see Table 1).

With the departure of some major tenants…

In Q1 2018, the average Grade-A office rent dropped to RMB9.6 per sqm per day (see Table 1).

Due to weak leasing demand and the huge amount of new supply, the overall Grade-A office vacancy rate increased 1.8 percentage points to 6.1% quarter on quarter (Q-o-Q) (see Table 1).

With the departure of some major tenants, the average rent in Core CBDs decreased to RMB11.6 per sqm per day, a Q-o-Q drop of 3.3%.

In Q1, the net absorption in Shanghai’s Grade-A office market was approximately 66,420 sqm (see Figure 2), of which only 19,000 sqm was recorded in Core CBDs. The vacancy rates in Pudong and Puxi increased 2.3 and 1.5 percentage points to 5.9% and 6.3% respectively