Asia Pacific Office Real Estate Market - Growth, Trends, COVID-19 Impact, and Forecast (2023-2028)

The size of Asia-Pacific office real estate market is around USD 264 billion in the current year and is anticipated to register a CAGR of greater than 10% during the forecast period.

Key Highlights

• The COVID-19 outbreak caused business closures, which reduced the market for conventional office space. In addition to its immediate effects, the pandemic affected the prospects for office real estate since traditional offices were less in demand as work-from-home policies gained popularity. The effects of the pandemic also show a rise in pricing misalignments. As the economy picks up speed, the misalignment is probably going to get smaller. However, due to shifting cultural tastes, the industry may face structural challenges in the office real estate market.
• Both the construction of new office buildings and the demand for high-end office space has significantly increased in major cities in recent years. This trend is anticipated to continue, especially in nations with rapid economic growth and urbanization, like China, India, and Australia. As a result, investors and developers should consider the Asia Pacific office real estate market.

Asia Pacific Office Real Estate Market Trends

Rise in Demand for Coworking Spaces

The demand for office space in the nation is driven by reasons such as flexibility, comfort, and convenience. The majority of businesses in a variety of industries, including IT, manufacturing, BFSI, startups, and even boutique businesses, are looking for office space to accommodate their employees. Additionally, a lot of businesses intend to expand to new areas, open remote or satellite offices, or both, which will add to the demand for these spaces. Today's high-end, well-organized, modern offices are outfitted with all the amenities needed to deliver an excellent working environment while taking care of the health and well-being aspects. For efficient business operations and great profits in the future, the decision-makers are investing in them.

As businesses recover from the COVID-19 impact, which had previously led to stringent containment measures, including social seclusion, remote working, and the cessation of commercial activity, they are resuming operations and adjusting to the new normal.

Increasing Demand for Data Centers Driving the Market

One of the world's fastest-growing data center regions is the Asia-Pacific. The research predicted that from 2018 to 2024, the colocation market in Asia-Pacific would expand at a compound annual growth rate of 12.2%. Global cloud providers, social media platforms, media content and video streaming, e-commerce platforms, and banking account for a large portion of the demand. There are two major types of data center marketplaces in the Asia-Pacific region: those that cater to local demand, like those in Hong Kong and Singapore, and those that cater to domestic demand, like those in Tokyo, Shanghai, and Australia. Intriguing Tier II markets include Indonesia and India, which are currently experiencing very little data center capacity despite experiencing rapid population development.

Even though there are still plenty of server CPUs available, recent supply chain issues made it more difficult to build data centers as the sector battled with ridiculously high construction material costs. As a result, it will probably take years for data center development to catch up to pre-pandemic levels, which will still make it challenging to meet current demand.

Asia Pacific Office Real Estate Market Competitor Analysis

The Asia-Pacific office real estate market has a variety of distinct players, and the market consists of both developers and consultancy firms. The market is projected to return to normalcy by this year. Businesses are preparing to meet future demands, and many are entering the market in search of new opportunities. CDL, Cushman & Wakefield, Frasers Property, Mitsubishi Estate Company, and Henderson Land Development Company are major market participants in the Asia-Pacific Office Real Estate Market. The competition amongst service providers is further heightened by the strict regulatory requirements that must be met. Businesses participate in M&A transactions to develop their product lines and expand regionally.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support