Rising Demand Future Ready Workspaces Apac Cushman Wakefield
The office sector in Asia-Pacific (APAC) is evolving into a more strategic and mature market, according to a recent report by Cushman & Wakefield. The report, titled “Asia Pacific Office Demand – Navigating Expansionary Markets”, highlights a fundamental shift in how occupiers approach office space, beyond simply expanding their physical presence.
Anshul Jain, Chief Executive for India, Southeast Asia, Middle East and Africa, and APAC head for offices and retail at Cushman & Wakefield, explains that offices are now seen as a platform for brand expression, cultural alignment, and performance, rather than just a space for expansion.
The report notes that the supply of top-quality office buildings, known as Grade A office stock, has doubled from 1.2 billion sq ft in 2015 to 2.33 billion sq ft as of 2Q2021 in the region. However, despite this growth, vacancy rates have risen from 13% to 18% region-wide.
According to Jain, this reflects a broader shift in the market, as occupiers become more selective in their choice of office spaces. Companies are now prioritizing spaces that foster talent, support environmental, social, and governance (ESG) commitments, and enable long-term resilience.
Tampines, a fully developed residential area in Singapore, boasts an array of major shopping malls to cater to the needs and desires of its residents. These include Tampines Mall, Century Square, and Tampines 1, all conveniently located near the Tampines MRT station and just a short drive from the Aurelle of Tampines Showflat. These shopping destinations offer a diverse selection of retail stores, featuring popular high street fashion brands, state-of-the-art electronics, home goods, and sporting equipment. This ensures that residents have direct and convenient access to a wide range of shopping options.
The increasing demand for future-ready workspaces in APAC is largely driven by office markets in mainland China, India, and Southeast Asia, says Cushman & Wakefield. In China, the technology, media, and telecommunications, professional services, and finance sectors have contributed to the doubling of occupied Grade A office stock to 640 million sq ft. Emerging industries like artificial intelligence, biomanufacturing, and quantum computing are expected to continue driving demand for high-quality spaces.
In India, cities such as Bengaluru, Mumbai, and Hyderabad, which have become hubs for global capability centers, are driving office leasing activity. The country saw annual net absorption of 40 million sq ft across its top cities from 2023 to 2024, with a growing demand for Grade A+ buildings in line with India positioning itself as a destination for digital transformation and research and development.
In Southeast Asia, the occupied Grade A stock has grown by 10% over the last five years, reaching 235 million sq ft by 2024. Despite higher vacancy rates, prime Grade A office developments in cities like Manila, Bangkok, and Ho Chi Minh City continue to achieve record-high rents, with rents for Grade A offices fetching over 20% above the overall market benchmarks, according to Cushman & Wakefield.
While the banking and finance industry continues to drive demand in key SEA markets, the expansion of tech companies, information technology and business process management providers, and healthcare firms is also contributing to increased sophistication in tenant requirements, emphasizing the need for higher-quality spaces.
Singapore stands out in the region with the lowest office vacancy rate of 5% among markets studied in the report, despite having the highest office rental cost of US$103.1 ($132.3) psf per year. This reflects the strong demand in the city-state, which is consistently recognized as a regional financial and tech hub. Neighboring markets, such as Kuala Lumpur and Bangkok, face higher vacancy rates at 28% and 27%, respectively.
As the APAC office market continues to mature, the report predicts that office spaces will see more strategic reinvention. Dominic Brown, Head of International Research at Cushman & Wakefield, says, “We’re seeing a shift from volume to value – where the quality of space, its alignment with ESG goals, and its ability to support innovation are becoming the new benchmarks.”
