Asia to lead world office building: report
Asia will lead the world in developing new office space as firms shift focus away from lacklustre markets in Europe and North America, a report said Tuesday.
Asia will be the only major global region to boast "significant" office completions in 2010 and 2011, before slowing somewhat in 2012, said the new report by international property firm CB Richard Ellis.
The region -- including Hong Kong, mainland China and Singapore -- will account for about two-thirds of world office completions by 2012, far outpacing development in Western Europe, North America and the Pacific, including Australia and Japan, said the report.
"Asian office development has by now fully resumed after slowing down briefly in the wake of the global economic downturn," said the report, "Global Office Development Cycle: Where are we now?"
"Other regions, in contrast, are experiencing either slightly below normal completions, such as the Pacific, or relatively scant completions, such as Western Europe and North America."
Asia will account for about 65 percent of the 293.2 million square feet (26.4 million square metres) completed in leading global office markets between 2010 and 2012, the report said.
Europe will account for about 23.6 percent, or 69.1 million square feet, of the total followed by North America at 7.9 percent (23.1 million square feet) and the Pacific with about 3.6 percent (10.5 million square feet).
On an annualised basis, office completions in North America -- pounded by the global financial crisis -- would drop by 70 percent between 2010 and 2012 compared with the yearly average between 2001 and 2009, the report said.
By contrast, Asia's average yearly office completions would soar by 50 percent compared with the previous nine years.
"Office demand in North America will remain sluggish in the near term as companies continue to be cautiously optimistic and try to preserve their cash reserves," the report said.
The big shift reflects firms looking to Asia amid a sputtering economic recovering in the West, and moving employees to boost their regional presence, the report said.
"This shift in corporate activity is reflected by the way in which the regional focus of office development has changed, especially since the global economy has begun to emerge from the financial downturn."