Asia office leasing_survey-3_Q2012-r

Colliers AsiA

3Q 2012

offiCe leAsing survey

MAIN-INdex 1Q 2012 2Q 2012 3Q 2012

Market Confidence 62.9% 64.2% 55.1%

sub-INdex 1Q 2012 2Q 2012 3Q 2012

New Leasing Inquiry 52.8% 54.4% 51.4%

Real Estate Requirements 79.3% 78.9% 60.4%

Vendors’ Expectations 49.4% 51.1% 41.5%

Rental Expectations 70.0% 72.2% 67.0%

exeCutives u m m A r y

Colliers International is delighted to present the results of our 3Q 2012 Asia Office Leasing Survey. We surveyed all of our office leasing professionals in Asia through an on-line questionnaire in early September 2012.

Based on the findings of our Survey and the methodology of Diffusion Index (DI), Colliers Asia Office Leasing Market Confidence Index was at 55.1% in 3Q 2012 (2Q 2012:64.2%), indicating that market participants are holding positive views on market outlook but their confidence is not as strong as previous quarter.

The sub-index of real estate requirements decreased to 60.4% in 3Q 2012 from 78.9% in 2Q 2012. It indicates the office tenants are seeking for expansion while the pace of expansion was less aggressive. In terms of rental expectations, market expectation is less strong when compared with 2Q 2012 since the reading of the rental expectations sub-index decreased to 67.0% in 3Q 2012 from 72.2% in 2Q 2012.

Colliers Asia Office Leasing Survey

3Q 2012

Colliers Asia Office Leasing MarketConfidence Index

The readings of the Index and Sub-Index fall within the range of 0% to 100%.A reading above 50% indicates the market trend is generally improving; below 50% indicates that it is generally declining.

New LeAsINg INQuIry

The overall level of new office leasing inquiry decreased in 3Q 2012. As reported, there were 25.5% of our brokers saying the level of inquiry was an increase, up from 23.3% in 2Q 2012. However, 22.6% of our brokers saw a decline in new leasing inquiry (2Q 2012: 14.4%). The diffusion index of clients’ new leasing enquiry was at 51.4% in 3Q 2012, decreased from the 54.4% in 2Q 2012.

Compared to last quarter, how do you see the level of new leasing inquiries in 3Q 2012?

neW inQuiry groWing At sloWer PACe


3Q 2012

New Leasing Inquiry Sub-Index

The readings of the Sub-Index fall within the range of 0% to 100%.A reading above 50% indicates the market trend is generally improving; below 50% indicates that it is generally declining.

Most ActIve teNANt groups

Similar to the preceding quarter, the most active office tenants groups remained “Banking, Finance, Insurance (FIRE)” and “IT” sectors during 3Q 2012.

Breaking down by key business sectors, rise in activity happened in “Banking, Finance, Insurance (FIRE)”, “IT” and “Professional Consultants” sectors.

Which of the following tenant groups are the most active in your market?

BAnKing AnD finAnCe is tHe most ACtive


3Q 2012

cLIeNts’ reAL estAte reQuIreMeNts

About 41.5% of our brokers saw an increase of real estate requirements from their clients; the percentage was lower than that in 2Q 2012 (i.e. 62.2%). Across the various key markets in the region, 20.8% of our brokers said a contraction of their clients’ real estate requirements during 3Q 2012, compared with 4.4% in previous quarter.

The reading of diffusion index of clients’ real estate requirements was at 60.4% in 3Q 2012 as compared to 78.9% in 2Q 2012, suggesting the clients are less aggressive in taking on additional space in 3Q 2012.

In view of your clients’ requirements, what are their real estate requirements?

less Aggressive in exPAnsions


3Q 2012

Real Estate Requirements Sub-Index


veNdors’ expectAtIoNs

In 3Q 2012, over half of the vendors (ie. 54.7%) offered the same level of leasing incentives as previous quarter. More vendors (31.1% in 3Q 2012 vs 23.3% in 2Q 2012) were being more generous in offering leasing incentives.

The reading of diffusion index of vendors’ expectations was at 41.5% in 3Q 2012. Since it was below the 50%-mark, it signified that vendors generally took a cautious view on the market and were being more generous in offering lease incentives.

venDors BeCAme CAutious

Looking at leasing incentives (free rent, cash, etc), are landlords in your market :


3Q 2012

Vendors’ Expectations Sub-Index


reNtAL expectAtIoNs

On a forward-looking basis, fewer brokers (46.2% in 3Q 2012 vs 56.7% in 2Q 2012) expected rents to increase over the next 12 months. Meanwhile, more brokers (41.5% in 3Q 2012 vs 31.1% in 2Q 2012) believed rents will remain stable over the next 12 months.

The reading of diffusion index of rental expectations was at 67.0% in 3Q 2012, decreased from 72.2% in 2Q 2012. Since it was above the 50%-mark, our brokers remain positive on prospective trend of office rentals in the next 12 months.

Over the next 12 months, do you expect rents in your market to:

Positive exPeCtAtions on rentAl groWtH


3Q 2012

Rental Expectations Sub-Index


This is a measurement of the change of clients’ inquiries during the quarterly period. Based on the methodology of Diffusion Index, the reading above 50% indicates the level of new leasing inquiries is improving during the quarter, and it is declining when it read below 50%.

NEW LEASINg INQuIRy INdExData is taken from the responses to the question – “Compared to last quarter, how do you see the level of new leasing inquiries in the current quarter?”

Colliers Asia Office Leasing Market Confidence Index = (dI1 + dI2 + dI3 + dI4 )/4

P1 = Percentage number of respondents that reported an improvement of inquiriesP2 = Percentage number of respondents that reported no changeP3 = Percentage number of respondents that reported a deterioration of inquiresdiffusion Index (dI1) of New Leasing Inquiry = (P1*1) + (P2*0.5) + (P3*0)

ThE MAIN INdExColliers Asia Office Leasing Market Confidence Index (“Leasing Confidence Index”) is the main index. It is constructed by using the methodology of Diffusion Index (DI) and the consolidation of four component sub-indices - New Leasing Inquiry, Real Estate Requirements, Vendors’ Expectations and Rental Expectations. Applying equal weighs to the four sub-indices, the Leasing Confidence Index with reading above 50% indicates the Asia leasing market confidence is general improving. The Index indicates the market confidence is deteriorating when it reads below 50%.

FOuR Sub-INdICESThe construction of the four sub-indices is based on the each of the following four questions.

metHoDology

Short questionnaires comprising five key questions had been sent to our office leasing brokers in the Asian region via an on-line survey platform during the first week of September 2012.

Using the technique of * Diffusion Index (DI), the results were used to develop four sub-indices covering (1) New Leasing Inquiry, (2) Real Estate Requirements, (3) Vendors’ Expectations and (4) Rental Expectations. After all, Colliers Asia Office Leasing Market Confidence Index is a composite index based on the above four diffusion indexes with equal weights.

* diffusion Index (dI) = (P1*1) + (P2*0.5) + (P3*0) P1 = Percentage number of respondents that reported an improvement P2 = Percentage number of respondents that reported no change P3 = Percentage number of respondents that reported a deterioration

A reading above 50 percent indicates the market trend is generally improving; below 50 percentage indicates that it is generally declining.


3Q 2012

This is a measurement of the change of clients’ requirements. Based on the methodology of Diffusion Index, the reading above 50% indicates the level of clients’ requirement is expanding during the quarter, and it is contracting when it read below 50%.

This is a measurement of vendors’ expectations on the leasing market with reference to the change of lease incentives being offered to their tenants. Based on the methodology of Diffusion Index, the reading above 50% indicates vendors’ expectations are improving during the quarter, but it is contracting when it read below 50%.

This is a measurement of rental expectations on the leasing market with reference to the read of brokers. Based on the methodology of Diffusion Index, the reading above 50% indicates rental expectations over the next 12 months are positive during the quarter, but it is negative when it read below 50%.

REAL ESTATE REQuIREMENTSData is taken from the responses to the question – “In view of your clients’ requirements, what are their real estate requirements?

VENdORS’ ExPECTATIONSData is taken from the responses to the question – “Looking at leasing incentives (free rent, cash, etc), are landlords in your market are being more generous, about the same or being less generous?

RENTAL ExPECTATIONSData is taken from the responses to the question – “Over the next 12 months, do you expect rents in your market to increase quickly, increase slowly, remain fairly flat or decrease slowly?

P1 = Percentage number of respondents that reported an expansion of clients’ requirementsP2 = Percentage number of respondents that reported no changeP3 = Percentage number of respondents that reported a contraction of clients’ requirementsdiffusion Index (dI2) of Real Estate Requirement = (P1*1) + (P2*0.5) + (P3*0)

P1 = Percentage number of respondents that reported landlords are less generousP2 = Percentage number of respondents that reported about the sameP3 = Percentage number of respondents that reported landlords are more generousdiffusion Index (dI3) of Vendors’ Expectations = (P1*1) + (P2*0.5) + (P3*0)

P1 = Percentage number of respondents that reported rents to increase either quickly or slowing in the next 12 monthsP2 = Percentage number of respondents that reported rents to remain fairly flat in the next 12 monthsP3 = Percentage number of respondents that reported rents to decrease slowly in the next 12 months

diffusion Index (dI4) of Rental Expectations = (P1*1) + (P2*0.5) + (P3*0)


3Q 2012

Colliers Asia Office Leasing Survey www.colliers.com

greAter cHINAbeijing, China502 Tower W3, Oriental Plaza No 1 East Changan Avenue Dongcheng DistrictBeijing 100738Tel : 86 10 8518 1633Fax : 86 10 8518 1638Amanda gaoManaging Director, North [email protected]

Chengdu, ChinaUnit 1504 Yanlord Landmark1 Renmin South Road Section 2Chengdu 610016Tel : 86 28 8658 6288Fax : 86 28 8672 3226Jacky TsaiGeneral [email protected]

guangzhou, China702 Teem Tower208 Tianhe RoadGuangzhou 510620Tel : 86 20 3819 3888Fax : 86 20 3819 3899Eric LamManaging [email protected]

Shanghai, China16F Hong Kong New World Tower300 Huaihai Zhong RoadShanghai 200021Tel : 86 21 6141 3688Fax : 86 21 6141 3699Lina WongManaging DirectorEast and South West ChinaInvestment Services, [email protected]

hong Kong, hKSAR5701 Central Plaza18 Harbour Road Wanchai, Hong HongCompany Licence No: C-006052Tel : 852 2828 9888Fax : 852 2828 9899Richard Kirke (E-279867)Managing [email protected] brunner (E-183614)Chief Executive Officer - [email protected]

Taipei, Taiwan49F TAIPEI 101 TOWERNo. 7 Xin Yi Road Sec 5, Taipei 110Tel : 886 2 8101 2000Fax : 886 2 8101 2345Andrew LiuManaging [email protected]

NortH AsIASeoul, South Korea10F Korea Tourism Organization Bldg.10 Da-dongJung-gu, Seoul 100-180Tel : 82 2 6740 2000Fax : 82 2 318 2015Jay yunSenior Director & General [email protected]

Tokyo, Japan Halifax Building3-16-26 Roppongi Minato-ku, Tokyo 106-0032 JapanTel : 81 3 5563 2111 Fax : 81 3 5563 2100 James FinkSenior Managing [email protected]

soutH eAst AsIAJakarta, Indonesia10F and 14F World Trade CentreJl Jenderal SudirmanKav 29-31 Jakarta 12920Tel : 62 21 521 1400Fax : 62 21 521 1411Mike broomellManaging [email protected]

Kuala Lumpur, Malaysiac/o Mark Lampard*Managing DirectorCorporate Solutions | Asia PacificTe : 65 6531 8601Fax : 65 6557 [email protected]* Based in Singapore

Karachi, PakistanSuite 2-A, level 2, Harbour House37-A, Lalazar AvenueBeach Hotel Road, Off. M.T Khan RoadKarachi, PakistanTel : 92 21 3561 2550-2Fax : 92 21 3563 6382Mohammed yasir QidwaiSenior Manager, Corporate Solutions & [email protected]

Lahore, PakistanSuite 2, Mezzanine 2, Executive FloorsAl-Qadir Heights, Main BoulevardNew Garden Town, Lahore, PakistanTel : 92 42 3584 3474-6Fax : 92 21 3563 6382Ahmed KhanCountry [email protected]

Islamabad, PakistanONE Constitution Avenue, Adjacent Convention Centre & Diplomatic Enclave Islamabad, PakistanTel : 92 51 834 7433Fax : 92 51 831 4737Waleed MurrawatRegional Sales [email protected]

Manila, Philippines10F Tower 2 RCBC PlazaAyala Avenue, Makati CityPhilippines1226Tel : 63 2 888 9988Fax : 63 2 845 2612david youngManaging [email protected]

Singapore1 Raffles Place#45-00 One Raffles PlaceSingapore 048616Tel : 65 6223 2323Fax : 65 6222 4901dennis yeoManaging DirectorSingapore & Industrial Services | [email protected]

bangkok, Thailand17/F Ploenchit Center2 Sukhumvit RoadKlongtoey, Bangkok 10110Tel : 66 2 656 7000 Fax : 66 2 656 7111 Simon LandyExecutive [email protected]

ho Chi Minh City, VietnamHo Chi minh City, vietnam7f Bitexco Building19-25 nguyen Hue streetDistrict 1, Ho Chi minh City, vietnamtel : 84 8 827 5665fax : 84 8 827 5667Peter dinninggeneral [email protected]

For further details, please contact:

Colliers Asia Office Leasing Survey www.colliers.com

hanoi, Vietnam10f, Capital tower Building109 tran Hung Dao streetHoan Kiem District, Hanoi, vietnamtel : 84 4 3941 3277fax : 84 4 3941 3278dane Moodiemanaging [email protected]

INdIAbengaluru, IndiaPrestige garnet, level 2, unit no. 201/20236 ulsoor road, Bengaluru 560 042tel : 91 80 4079 5500fax : 91 80 4112 3131goutam Chakrabortyoffice [email protected]

Chennai, Indiaunit 1C, 1st floor, Heavitree Complex23 spurtank road, ChetpetChennai 600 031tel : 91 44 2836 1064fax : 91 44 2836 1377Kaushik Reddyoffice [email protected]

gurgaon, India1st floor, technopolis BuildingDlf golf Coursemain sector roadsector 54, gurgaon 122 002tel : 91 124 4375807fax : 91 124 4375806Ajay Rakhejaoffice [email protected]

Kolkata, Indiainfinity Business Centre, infinity Benchmarklevel 18, room no 13, Plot g - 1Block eP & gP, sector v, salt lakeKolkata 700 091, West Bengaltel : 91 33 2357 6501fax : 91 33 2357 6502Soumya Mukherjeeoffice [email protected]

Mumbai, India31-A, 3rd floors, film Centre68 tardeo roadmumbai 400 034tel : 91 22 4050 4500fax : 91 22 2351 4272Prabhu Raghavendraoffice [email protected] McKaysouth Asia Directoroffice & integrated [email protected]

New delhi, India204/205, 2nd floorKanchenjunga Building18 Barakhamba roadnew Delhi 110 001tel : 91 11 4360 7500fax : 91 11 2335 6624Ajay Rakhejaoffice [email protected]

Pune, IndiaBramha luxury Hotels ltd. (le meridien Pune)101 r.B.m. roadPune 411 001, maharashtratel : 91 20 4120 6435fax : 91 20 4120 6434Suresh Castellinooffice [email protected]

AustrALAsIAAdelaide, Australialevel 10, 99 gawler PlaceAdelaide sA 5000tel : 61 8 8305 8888fax : 61 8 8231 7712James youngstate Chief [email protected]

brisbane, Australialevel 20 Central Plaza one345 Queen streetBrisbane QlD 4000tel : 07 3229 1233fax : 07 3120 4555 Simon beirnestate Chief executive [email protected]

Canberra, Australiaground floor, 21-23 marcus Clarke streetCanberra ACt 2601tel : 61 2 6257 2121fax : 61 2 6257 2937Paul Powderlystate Chief [email protected]

Melbourne, Australialevel 32 367 Collins streetmelbourne viC 3000 tel : 61 3 9629 8888fax : 61 3 9629 8549John Marascostate Chief [email protected]

Perth, Australialevel 19, 140 st georges terracePerth WA 6000tel : 61 8 9261 6666fax : 61 8 9261 6665K. Imran Mohiuddinstate Chief [email protected]

Sydney, Australialevel 12, grosvenor Place225 george streetsydney nsW 2000tel : 61 2 9257 0222fax : 61 2 9251 3297Malcom Tysonstate Chief [email protected]

Auckland, New ZealandsAP tower, level 27151 Queen streetAuckland 1140tel : 64 9 358 1888fax : 64 9 358 1999Mark SynnottChief executive officer, new [email protected]

Wellington, New Zealandlevel 10, 36 Customhouse QuayWellington 6011tel : 64 4 473 4413 fax : 64 4 499 1550 (Agency) : 64 4 470 3902 (valuation)Richard Findlaymanaging [email protected]

www.colliers.com

Copyright © 2012 Colliers International.

You are receiving this collateral because you either subscribed for it or expressed your interest to receive it at some point to Colliers International. If you do not wish to receive future communications from us, please contact Colliers International by email at [email protected] with your name and item to unsubscribe.

The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.

Asia office leasing_survey-3_Q2012-r

Real Estate

Transcript of Asia office leasing_survey-3_Q2012-r