Asia Pacific office leasing markets were subdued in Q1 2019 during what is traditionally a quiet period for leasing activity. Softer demand and limited occupier movement in tight markets weighed on leasing momentum.
Leasing demand in China tier 1 cities weakened, with Shanghai reporting the largest decline in net absorption. Although leasing activity in Beijing gradually picked up, momentum remained weak. Elsewhere, demand in India increased marginally this quarter. However, in Delhi NCR, lease discussions slowed and deal closures were delayed due to the general election.
Tech demand remained strong, led by IT companies establishing offshore bases in India. However, demand weakened in most Chinese cities, with several companies opting to set up new offices in coworking centres rather than committing to long leases.
Coworking operators continued to add to their footprint in major gateway cities, with Tokyo and Singapore both witnessing steady growth by international operators. However, the pace of expansion slowed in Hong Kong and Shanghai.