The Asia Pacific region will lead an unprecedented office building boom globally over the next three years with nearly 60 percent of the world's new offices being built in the region between 2017 and 2019, major international real estate consultancy Cushman & Wakefield said in its latest report.
More than 65 million square meters of new office space will be delivered during the period, the report says, which is the equivalent of recreating five cities' worth of office inventory that covers Washington DC, Dallas, London, Singapore and Shanghai.
Within the region, new supply will be concentrated in Beijing, Shenzhen, Shanghai, Manila and Bangalore. These five cities will account for 55 percent of overall construction in the Asia Pacific region, more than one-third of the global market.
"Nearly 200 million square feet (18.6 million square meters) of new office supply is expected to enter China's four Tier-1 cities, Hong Kong and Taiwan over the next three years," said James Shepherd, managing director of research for Cushman & Wakefield's China operation. "The new projects will replace existing lower-quality buildings and raise the profile of China's Grade A office market."
The average vacancy rate of the six major office markets in China is expected to rise to 17 percent by the end of 2019, while office absorption may total around 133 million square feet during the three-year period through 2019, according to the company.
The majority of upcoming projects are located in decentralized or emerging areas.