India has led the region, and arguably the world, in office demand over the past 18 months, recording over 62 million square feet (msf) of net absorption. This has accounted for 62% of the regional total. This trend is forecast to continue with the region’s top 25 cities recording cumulative net absorption of 78 msf per annum in 2024-27, with India accounting for 55% of the total.
Near-term supply of 215 msf (2024-26) continues to exceed demand, which is forecast to push vacancy up to almost 20% at peak in 2026, at which point it stabilises. Vacancy increases are most noticeable in Guangzhou, Shenzhen and Hyderabad, while Jakarta and Manila are expected to experience strong tightening.
In line with this, rent growth pressures are expected to increase over the forecast horizon. Strong growth is forecast in Brisbane, Sydney and Singapore with more modest growth In India, Seoul and Tokyo. Softening rents are forecast in Greater China over the near term before returning to growth later in the forecast horizon.
Tenants, especially in more mature markets, remain selective in their office accommodation, targeting high quality buildings in locations with access to transport infrastructure and local amenity. Landlords choosing to undertake capital works to reposition their assets are also seeing positive leasing results, with smaller tenants in markets such as Tokyo, Singapore, and Australia especially, favouring turn-key solutions through fitted out suites.
