The Asia-Pacific Prime Office report aims to provide occupiers, landlords and investors with a regular analysis of the rental performance of prime office markets across Asia-Pacific.

The last quarter of 2020 turned out as many had expected for the Asia-Pacific office markets as most of the major regional economies ended the year in recession, and many occupiers started to re-configure their office footprints more efficiently while landlords shifted their strategies to preserve occupancies at the expense of asking rents.

For Q4 2020, Knight Frank’s Asia-Pacific Prime Office Rental Index fell 0.8% quarter-on-quarter, led mainly by Mumbai and Hong Kong which recorded declines of 5.5% and 4.1% respectively during the same period. On an annual basis, the overall index was down 4.9%
year-on-year, while vacancy rose 0.8% to 13.4% on continued new supply additions and muted demand.

Going forward, while vaccine optimism has generally boosted economic growth expectations across the region, the uncertainty created by recent infection resurgences, which has put some markets back into lockdown, could act as a deterrent for occupiers and potentially hamstring any recovery momentum built up towards late last year. As such, we forecast rents to decline between minus 3 to 0% in 2021.