Will office renters have favourable market conditions in 2023?

The market will remain tenant-friendly when high-amenity office buildings with sustainable credits are finished and ready for occupancy in 2023.

Knight Frank’s most recent study, Asia-Pacific Outlook Report 2023: Pivoting Towards Opportunities, predicts that regional office rents would increase by 2% while rents in the logistics sector will rise by 5.5%.

According to the analysis, real estate has a generally low connection to equities and bonds and offers strong diversification benefits.

According to the report, the Asia-Pacific region is anticipated to continue to experience the fastest growth rates in the world despite ongoing pressures made worse by the Russia-Ukraine conflict and global financial uncertainty.

Domestically focused economies like India and the expanding Southeast Asia are anticipated to continue to support regional growth in the coming year, even though most of the region’s growth momentum is still normalising.

Christine Li, the company’s Asia Pacific head of research, believes that there is still room for fundamentals to surprise on the positive side. The little softening of the zero-Covid approach and the lower-than-anticipated terminal interest rates, she said, corroborate this.

The time of inbound traveller quarantine has currently been reduced by Chinese authorities, which is a positive step that might open the door for further adjustment and a potential exit in 2023–2024.

“Given that the Federal Reserve’s data watch has begun to show early signals of inflation peaking, we can afford to be upbeat. The current macroeconomic and policy uncertainties, when resolved, will reduce bid-ask spreads and open the door for greater investment activity, albeit it is unclear whether they can be sustained “She spoke.

The local market would be impacted, according to Sarkunan Subramaniam, group managing director of Knight Frank Malaysia.

“We are optimistic, nonetheless, that the newly elected unity government will be able to lay out clear, consistent policies for attracting foreign investment to our nation and will support any direct actions that will revitalise and sustain the expansion of the real estate sector. To see recovery across all sectors, Malaysia has to regain the confidence of investors in our economic growth “said he.