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Follow on Google News | Fading Impact of Global Financial Crisis on Asia Pacific Office Tenants’ Leasing Decision-MakingColliers International Office Tenant Survey Reveals the Office Markets Are Heading towards an Upswing or even the Next Boom
the impact of the global financial crisis (GFC) on tenants’ leasing decision-making workplace design the importance of building selection in staff attraction and retention environmental sustainability “After coming through the economic uncertainty of the GFC, tenants in Asia Pacific are generally optimistic about the economy and their prospects for growth,” said Chris Cuff, executive director, corporate solutions, Asia Pacific, Colliers International. “From a demand perspective, commercial property market cycle is improving however most tenants are still very focused on cost-savings, which is impacting their choice of office accommodations.” The following are some key findings of the survey: The Impact of the GFC on Tenants’ Leasing Decision-Making: Facing the challenge during the financial crisis, management of the tenants surveyed in Asia and Australasia reacted in similar ways, with cost savings and the need to put expansion plans on hold becoming dominant in their decision-making. In Asia, many companies took the opportunity of falling rental to take a flight to quality, and undertook new strategies such as “hot-desking” 52% of the tenants surveyed still feel that the GFC is affecting their leasing decisions, but this varies quite considerably from country to country. Although over half of the tenants surveyed in Indonesia, Thailand and Taiwan still think that the GFC is affecting their decisions, the majority (83%) in Australia and New Zealand indicate that the GFC is no longer having an effect on their leasing decision-making. Most tenants in Hong Kong (62%), India (58%), Singapore (57%) and China (52%) also think in the same way as the majority in Australia and New Zealand. The tenants’ optimism in the property market is proven when they are asked where the market is now sitting on the property cycle clock, with 12 o’clock representing peak, 3 o’clock for downswing, 6 o’clock for trough and 9 o’clock for upswing. All countries in Asia Pacific, apart from Thailand, see the market as past 6 o’clock i.e. having passed the bottom and moving towards the upswing. Overall, Hong Kong tenants had a more confident outlook on their market with an average clock time of 10 o’clock, believing the local property cycle is now in the upswing and heading towards the next boom. The lack of confidence in Thailand is the result of not only the GFC but also its own internal situation. “The past 18 months have been a difficult period for the country”, pointed out Patima Jeerapaet, Managing Director of Colliers International Thailand. “However there is a growing feeling that the worst is behind us and confidence may soon return to the market which would propel us past six o’clock and into the upswing”, he continued. Antony Picon, Senior Manager for Research believes the clock has affected the office market as take up has been weak over the past two years. “Out of all the countries in the study Thailand is at the bottom when it comes to the percentage of companies relocating and redesigning their head office over the past two years” he said. “However when businesses become more assured about the overall climate in the country we are likely to see pent up demand being unleashed in a short period of time, energizing the office market”, he added. Workplace Relocation and Design: China and India Show Greater Tendency to Relocate or Redesign Their Offices According to the survey results, the greatest amount of tenant relocation and redesign activity is happening in China and India, with 55 and 58 responded tenants in the two countries, respectively, saying that their organisations are planning to relocate its local head office or redevelop the layout and design within the next three years. The survey also reveals the main factors (other than cost) to make the tenants to move within the next five years. In Asia, the important factors include a more convenient building location, more flexible lease terms, expansion or consolidation, decentralisation, taking the flight to quality, improved building environmental performance and better building management. Building Selection in Staff Attraction and Retention: More Important in Bigger Firms than Smaller Organisations Almost half of the surveyed tenants rated building choice as “very important” to attract and retain staff, however, smaller organisations (with less than 50 employees) tend to think it is less important. Amongst various building attributes, the important ones in terms of attracting and retaining staff include a location close to public transport, air quality and security. Comparing to the important building attributes, cost remains a significant factor in office choice. For example, over 50% of the respondents in Hong Kong, Singapore and Taiwan indicate that cost remains more important than the most important factor (other than cost) they have selected in the survey. Environmental Sustainability: In Asia, the tenants in China, India and Taiwan pay relatively more attention on green elements of its office, with over 40% of the tenants surveyed evaluating a building’s environmental performance during building selection for occupancy. The most cited factors driving organisations’ # # # Colliers International Thailand - Experienced Real Estate Property Consultants in Thailand- was established through combining the resources of the global real estate services firm Colliers International, and Pasupat Realty Co.Ltd. End
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