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Sydney outperforms Asia Pacific region in office rent growth 

JLL data reveals office rents in Sydney up 22.3 percent in 2016

​​SINGAPORE, 18 January 2017 – There is solid demand for office space in key markets across Asia Pacific, particularly in Sydney, as the region remains stable amid global economic uncertainties, according to JLL’s latest market data.

Companies across many sectors – particularly those in financial services and technology – maintained healthy demand for space in the office sector, in an otherwise tepid climate. Australia outperformed the rest of the region, with office rental values rising significantly in Sydney and Melbourne’s Central Business Districts (CBDs) at 22.3 percent and 13 percent year-on-year respectively. The shortage of office stock resulting from of buildings to make way for the construction of the Sydney Metro has led to a reduction in office supply, which has boosted rental values.

“For investors with their eyes on the Australian market, there is the potential to capitalise on the upturn in the leasing market within the office sector, where lower Grade A or good Grade B assets have the potential for rental growth and lower vacancy risks,” says Dr Megan Walters, Head of Research, Asia Pacific at JLL.

This tight vacancy in the office sector was also observed in Bangalore, with low supply bolstering growth in the Secondary Business District. Given its position as India’s start-up hub, demand for real estate has been robust in the city with capital values in the office sector growing at 8.4 percent year-on-year last quarter, a trend that is likely to continue.

Encouraging outlook

Overall, capital values across the wider Asia Pacific region maintained their growth trajectory, increasing by 0.5 percent over the final quarter of 2016. In Hong Kong, however, demand from mainland Chinese investors pushed up capital values within the Central district at 7.6 percent growth year-on-year.

Meanwhile rents across the region increased 0.2 percent quarter-on-quarter in aggregate. In Singapore, seasonal factors and signs of stability in the office leasing market slowed down the rate of rent declines. Rents fell -1.2 percent quarter-quarter, less than the -2.1 percent quarter-on-quarter fall in the previous quarter. Investors, sensing a bottoming in the market, are actively looking to deploy capital in the city-state.

“Asia Pacific real estate markets are expected to remain resilient over the next three years and outperform other regions, corporate occupational demand and rental performance,” says Dr Walters. “Australia and China’s Tier I cities in particular will deliver favourable risk-adjusted returns.”

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About JLL

JLL (NYSE: JLL) is a professional and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate.  JLL is a Fortune 500 company with, as of December 31, 2015, revenue of $6.0 billion and fee revenue of $5.2 billion, more than 280 corporate offices, operations in over 80 countries and a global workforce of more than 70,000.  On behalf of its clients, the company provides management and real estate outsourcing services for a property portfolio of 4.0 billion square feet, or 372 million square meters, and completed $138 billion in sales, acquisitions and finance transactions in 2015. As of September 30, 2016, its investment management business, LaSalle Investment Management, has $59.7 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit

JLL has over 50 years of experience in Asia Pacific, with 36,000 employees operating in 94 offices in 16 countries across the region. The firm won 15 awards at the International Property Awards Asia Pacific in 2016 and was named number one real estate investment advisory firm in Asia Pacific for the fifth consecutive year by Real Capital Analytics.