APAC Office Demand Soars by 15.9% in 2024, Led by India, Australia, and Japan
The demand for office space across Asia Pacific’s top markets surged by 15.9% year-on-year, reaching an impressive 8.8 million square meters in 2024, according to the latest report from Colliers. The Asia Pacific Office Market Insights H2 2024 and Outlook 2025 highlighted key factors such as corporate expansion, the return-to-office trend, and the rise of global capability centres as key drivers behind this growth.
Leading the charge in office space demand were India, Australia, and Japan, with these markets showing strong growth and resilience in the face of a changing economic landscape. Mike Davis, Colliers’ Managing Director of Occupier Services for Asia Pacific, noted that the region’s office market is well-positioned for continued growth, particularly as global capability centres expand and government measures support market stability.
Key Highlights from the Report
- India, Australia, and Japan: These three markets led the demand surge, with India recording a 7% year-on-year growth in new office supply during H2 2024. India also accounted for more than 60% of the new supply in the region during this period.
- Moderated Demand in Some Markets: While countries like India, Australia, and Japan experienced notable growth, other markets such as New Zealand, the Philippines, South Korea, Hong Kong, and Taiwan saw more subdued demand.
- Office Space Supply: Despite new office supply largely keeping pace with demand, it fell by 16.9% year-on-year. This supply moderation was particularly noticeable in markets like Hong Kong and Taiwan, though India and Indonesia saw an uptick in new supply.
What’s Driving the Growth?
The office demand spike can be attributed to several key factors:
- Corporate Expansion: Companies continue to scale up operations across the region, leading to an increased need for office space.
- Return-to-Office Trend: As businesses shift toward hybrid and fully in-office models, the demand for traditional office spaces has strengthened.
- Growth of Global Capability Centres: The expansion of these centres, particularly in India and Southeast Asia, is expected to fuel continued demand for office space.
- Favorable Economic Conditions: Controlled inflation, easing borrowing costs, and supportive government measures are creating an environment conducive to growth, according to Colliers’ experts.
Outlook for 2025
Looking ahead to 2025, Colliers anticipates that demand for office space will continue to strengthen across most APAC markets, with vacancy rates expected to remain stable. High-activity markets are likely to experience continued rental growth, especially in peripheral business districts. The flight-to-quality trend will dominate, with occupiers seeking modern, flexible, and sustainable office spaces that enhance collaboration and productivity.
In summary, the outlook for the APAC office leasing market remains positive, driven by corporate expansion, government support, and the ongoing return-to-office trend. As markets such as India, Australia, and Japan continue to lead the charge, office space demand is poised for sustained growth into 2025.
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