1.5 million square metres of office space absorbed in Asia Pacif

August 11, 2010

Around 1.5 million square metres of office space was absorbed in the Asia Pacific market in the second quarter of this year.

That’s almost five times the amount recorded during the same period in 2009.

A new research report released by global property adviser DTZ has found that occupied space in the Asia Pacific region increased significantly in the quarter, as companies resumed expansion plans and upgraded to better quality space on the back of strong economic growth.

DTZ forecasts that prime rents in the region will grow by an average of 6.2 per cent annually between 2010 and 2014, with two of Asia’s ‘tigers’ – Hong Kong and Singapore – expected to outperform this forecast.

According to DTZ’s Asia Pacific Property Times, net absorption in Beijing increased 50 per cent quarter-on-quarter.

This takes net absorption for the first half of the year to almost 278 thousand square metres – only 5.0 per cent less than the whole of 2009.

In Delhi, a 30 per cent increase quarter on quarter means that take-up in 2010 has already surpassed the full year 2009 level.

DTZ’s head of Asia Pacific Research, David Green-Morgan said better than expected economic conditions in the region were boosting business sentiment and strengthening demand as companies upgraded to better quality space.

In fact, Mr Green-Morgan said while the pace of the recovery varied across markets, DTZ’s rental growth forecasts have largely returned to positive growth.

He forecasts that average prime rents, on a capital-weighted basis, will increase by 4.6 per cent this year.

However, Mr Green-Morgan said a cause for caution in the region was the substantial development pipeline, which may dampen rental growth in some markets as vacancy levels increase.

Source : Channel NewsAsia – 11 Aug 2010

OUE buys DBS Towers 1 & 2 for nearly S$871m

August 11, 2010 

Overseas Union Enterprise (OUE) has bought DBS Towers One and Two for nearly S$871 million.

DBS Towers, with a 99-year lease, is located at Shenton Way in the heart of the central business district.

DBS Tower One was built in 1975 and was then the tallest building in Singapore and the first to incorporate a covered walkway around the entire city block.

Together with DBS Tower Two, the 37-storey skyscraper comprises a total gross floor area of around 1.2 million square feet and a total net lettable area of some 883,000 square feet.

Both towers are currently fully leased out. Major tenants include financial institutions like DBS Bank, Deloitte & Touche, Aviva and Deutsche Bank.

OUE said the acquisition is in line with its strategic goal of maximising investment opportunities from high-yield properties and landmark assets in Singapore.

The acquisition will be funded by a combination of internal funds and debt facility.

OUE said DBS Towers is poised to benefit from organic growth through positive rental reversions.

This is because prime office rents are expected to rise over the next few years as a result of limited new supply of office space in 2013 and 2014.

OUE said there is also asset enhancement potential in DBS Towers. The property is strategically located near the Marina Bay area, which is being transformed with the addition of convention, leisure, commercial and entertainment facilities.

Source : Channel NewsAsia – 11 Aug 2010