Asian office markets to stabilise

The Asian office market showed signs of stabilising in the second quarter of 2009 but companies remained focused on reducing costs and tightening their real estate expenditures.

A new report by real estate consulting firm CB Richard Ellis South Asia, said, the pressure to further reduce office space requirements nevertheless began to ease as the macro economic environment became somewhat calmer and, in the case of China, began to recover and improve.

Most Asian cities either recorded a smaller negative net absorption or a mild increase in office requirements.

Retaining existing tenants and attracting new ones remained the top priority for office landlords in Asia, the report said.  In many markets, office landlords displayed a definite willingness to negotiate lease restructuring and offer more incentives to desirable corporate occupiers.

However, leasing markets were sluggish overall and office rents remained caught in the down cycle.

''While the second quarter of 2009 observed some improvement in the office market with levels of enquiries going up, vacancy levels continued to remain high," said Anshuman Magazine, chairman  & managing director, CB Richard Ellis South Asia.