Tech, pharma firms among main drivers of Asia-Pacific office demand

The company’s latest “Office Market Sentiment Survey” found the outlook for most office markets in Asia-Pacific to be positive. 
There is strong demand in the Australian cities of Melbourne and Sydney, as well as in Bangalore in India and Bangkok, especially in their central business districts (CBDs). 
Other cities such as Ho Chi Minh City, Manila and Hong Kong continue to hold steady in terms of rental outlook, the survey found. 
Among the top sectors fuelling the demand for office space in 2017 are technology, professional services, pharmaceutical and real-estate businesses.
“The demand for space in much of the region is being driven by domestic companies seeking to enter or expand into prime CBDs, as well as growth in sectors such as technology and pharmaceuticals,” said Jeremy Sheldon, managing director, Markets & IPS, at JLL Asia Pacific.
It has been reported that seven of the top 10 technology firms globally have set up their regional headquarters in Singapore, with 57 per cent of the offices in the island-state’s CBD. 
There is also strong government support for the technology sector in the Lion City, with the launch of the “Smart Nation” initiative in 2014.
Melbourne is another forerunner, with more than half of Australia’s top 20 technology companies located in the city and several high-profile Silicon Valley companies having opened their Asia-Pacific headquarters there. 
The Victoria state government has also been encouraging the sector through projects such as the “Tech Voucher” programme, JLL said. 
Meanwhile, Vietnam is steadily growing its tech industries, and is constructing the US$40-million (Bt1.41 billion) Saigon Silicon City Centre.
Bangkok has seen robust demand from e-commerce, call centre and IT firms for new office space, and this trend is expected to continue in 2017, according to JLL.
The pharmaceuticals industry is another sector to watch. 
Last August, the Board of Investment approved of a five-year waiver of corporate income tax for pharmaceutical firms in a bid to strengthen Thailand’s position as a medical hub. 
In Manila, the prime One World Place in Bonifacio Global City saw two pharmaceutical and medical firms occupying an office space of 1,000 square metres each. 
Singapore’s One-North will also be the new Asian headquarters for a phama giant later this year, while Mumbai has recently finalised a 15-year lease deal with a healthcare company setting up its research and development centre in the city.
The global pharmaceuticals market is expected to be worth $1.3 trillion in 2018. 
With Asia outpacing other continents in terms of population growth, this means a bigger market for medical products and solutions, which pharmaceutical companies will be eager to capitalise on, JLL said.
Over the next 12 months, the property agency expects rents in 13 cities out of the 17 tracked to either remain steady or increase. 
Demand from high-growth sectors as well as quality developments in new and existing Asia-Pacific commercial centres are likely to result in a robust rental property market this year.
The cities in which rents are expected to increase are Auckland, Melbourne, Osaka, Bangalore, Bangkok, Mumbai, Sydney and New Delhi.
The four cities where rents are expected to fall are Beijing, Jakarta, Shanghai and Singapore, while rentals are expected to remain stable in Ho Chi Minh City, Hong Kong, Manila, Seoul and Tokyo, the survey found.