Asia-Pacific Research Office Markets Office Highlights Q3 2025 Prime rental growth in the region lost momentum to remain largely unchanged quarter-on-quarter in Q3 2025, down from the marginal 0.2% registered in the second quarter. The decline in Chinese mainland markets accelerated amid another supply-heavy quarter. Rental growth in Southeast Asia also flatlined, as landlords continued to prioritise maintaining or raising occupancy levels. Landlords in India and Australia, in contrast, remained optimistic. ...

Investment Rating - The report indicates a positive outlook for Thailand's manufacturing sector, highlighting strong foreign direct investment (FDI) and robust demand for serviced industrial land plots (SILP) [1][51]. Core Insights - Thailand's FDI reached THB 1.14 trillion across 2,259 projects in H2 2025, with a record high demand for SILP, totaling 12,955 rai sold [1][51]. - The average asking price for SILP increased by 5.0% to THB 6.65 million per rai, reflecting a tightening market with high occupancy rates in ready-built factories (RBF) at 98.4% [2][66]. - Future demand is expected to be robust but more specialized, driven by supply chain relocations and growth in digital and electrical industries, with structural factors becoming more critical for investors [3][79]. Market Overview - Thailand's economy saw a slowdown in Q3 2025, with real GDP growth at 1.2% YoY, down from 2.8% in the previous quarter, although external demand and a trade surplus provided some support [8]. - Goods exports rose by 11.5% YoY to USD 86.2 billion, with high-technology manufacturing leading the growth [9]. - Private investment grew by 4.2%, while public investment contracted by 5.3%, indicating a divergence between investment and consumption [10][13]. Foreign Direct Investment (FDI) - Cumulative FDI approvals increased significantly from THB 629.6 billion in Q2 to THB 1.14 trillion by the end of 2025, with the digital sector attracting the largest share of investment [24][26]. - The digital sector's capital inflow rose by 71.6%, highlighting a shift towards technology-driven industries [26]. Serviced Industrial Land Plots (SILP) - The total supply of SILP grew by 0.8% H-O-H to 185,498 rai, with the Eastern Economic Corridor (EEC) commanding a 63.6% market share [42][49]. - The cumulative sales rate for SILP reached 93.5%, indicating a highly competitive market with limited available inventory [52][56]. Ready-Built Factory (RBF) Market - The RBF market saw a national occupancy rate of 98.4%, with the EEC achieving total utilization at 99.94% [66][72]. - Average rental rates increased to 202.9 THB per sqm, reflecting a landlord's market driven by high demand from sectors like EV and electronics [74]. Structural Shifts in the Market - The industrial property market is transitioning towards more capital-intensive and infrastructure-dependent activities, influenced by trade policies and tariff asymmetries [79][80]. - Developers are increasingly adopting built-to-suit models, reducing speculative development and contributing to supply constraints [82]. Future Outlook - Industrial demand is expected to remain resilient but selective, with ongoing supply chain diversification and digitalization [84]. - Long-term structural constraints in power and infrastructure capacity may impact effective supply, leading to uneven land and rental price growth [84].

Investment Rating - The report indicates a cautious but positive outlook for the UK office market, with a focus on Grade A space and a potential increase in investment activity in 2026 [5][11]. Core Insights - The UK office market showed resilience in 2025, with a total take-up of 5 million sq ft, slightly below 2024 levels but in line with the five-year average [6]. - Demand for Grade A office space remains strong, accounting for 61% of total take-up, driven by the Financial and Professional Services sector [6]. - The overall vacancy rate reached 14.1% in Q4 2025, with Grade A vacancy slightly increasing to 3.4%, indicating a competitive market for premium space [6]. - Investment volumes in the UK regional cities totaled £916 million in 2025, down 38% from the ten-year average, but the second half of the year saw increased activity [12]. - Prime rents across the UK regional cities rose by 3% annually, with the average now at £41 per sq ft, reflecting strong demand for quality office space [6][12]. Summary by Sections Leasing Overview - Total take-up for 2025 was 5,021,202 sq ft, which is a 5% decrease compared to the five-year average [4]. - Active demand at year-end was 3.9 million sq ft, with Financial and Professional Services leading at 43% [6]. - The development pipeline remains constrained, with only 1.7 million sq ft under construction [6]. Investment Overview - Investment volumes reached £916 million in 2025, which is 28% below 2024 levels [12]. - The second half of 2025 accounted for 60% of total investment activity, indicating a shift in buyer and seller pricing expectations [11]. - Prime office yields remained stable, ranging from 6.50% to 10.00% across various cities, highlighting the relative value outside London [12]. Leading Markets - **Aberdeen**: Total take-up was 294,709 sq ft, with Grade A vacancy at 1.7% [21]. - **Birmingham**: Annual take-up reached 651,507 sq ft, with a strong demand for Grade A space [27]. - **Bristol**: Total take-up was 604,119 sq ft, with a notable increase in demand for fitted space [33]. - **Cardiff**: Annual take-up was 289,808 sq ft, with a tightening supply of Grade A space [39]. - **Edinburgh**: Total take-up was 371,659 sq ft, with Grade A vacancy at 7.0% [45]. - **Glasgow**: Total take-up reached 471,753 sq ft, with a strong demand for prime offices [52]. - **Leeds**: Annual take-up was 632,790 sq ft, with a focus on high-quality workspace [59]. - **Manchester**: Total take-up was 1,059,264 sq ft, with a significant flight to quality [65]. - **Newcastle**: Total take-up was 458,893 sq ft, with a strong demand for modern, amenity-rich spaces [72]. - **Sheffield**: Total take-up was 192,399 sq ft, with a focus on refurbishment projects [76].

Investment Rating - The report indicates a positive outlook for the Lagos real estate market, highlighting its role as a major economic pillar in Nigeria, particularly after the GDP rebasing exercise [4][15]. Core Insights - The Nigerian economy is transitioning towards stabilization and growth, with a notable GDP growth of 3.98% in Q3 2025, driven by a resilient non-oil sector [5][15]. - Real estate has emerged as the third-largest sector in the rebased economy, contributing 13.36% to total real GDP, underscoring its structural importance [9][15]. - Inflation has moderated significantly, decreasing from 25.3% in June to 15.15% by December 2025, which is expected to support market stability [12][15]. - The naira has stabilized within a managed band, supported by a significant increase in external reserves, which reached $45.45 billion by December 2025 [13][15]. - The enactment of the Nigeria Tax Act 2025 is anticipated to enhance the macro environment for real estate, promoting formal agreements between landlords and tenants [14][30]. Economic Update - The GDP rebasing exercise revealed a larger and more diversified economy, with nominal GDP revised upward by 41.7% [4]. - Real estate's contribution to GDP highlights its critical role in national wealth, with a quarter-on-quarter growth rate of 3.50% [5][9]. - The construction sector outperformed the broader economy with a real growth rate of 5.57%, driven by public infrastructure projects [11]. Residential Market Review - Residential rents in Lagos continued to rise despite moderated inflation, driven by strong demand and constrained supply [22][32]. - Government interventions have facilitated the delivery of 653 residential units through public-private partnerships [23][32]. - The launch of the MOFI Real Estate Investment Fund offering long-term loans at 9.75% indicates ongoing public sector efforts to address housing shortages [24][32]. Retail Market Review - The retail sector has seen limited new development, with a gradual reconfiguration of tenant mix and retail strategies [33][39]. - Indigenous convenience-focused brands have gained traction, reflecting a shift towards cost-efficient retail formats [33][39]. - The average prime retail rents in Lagos are aligned with several African peers, indicating competitive pricing [35]. Office Market Review - The Lagos office market is showing signs of recovery, with Grade A occupancy levels reaching 73% [40][47]. - Rental performance has softened, particularly for prime assets, with effective rents adjusting downward to support occupancy [41][47]. - The emergence of new office developments in Ikeja indicates continued demand for modern office spaces [43][47]. Industrial Market Review - The industrial sector remains resilient, supported by logistics demand and manufacturing activity within Special Economic Zones [49][56]. - Prime industrial rents vary significantly based on infrastructure quality, with Grade A demand accelerating in well-serviced areas [51][56]. - The demand for warehouse spaces has grown approximately 25% year-on-year, reflecting the sector's expansion [74][56]. Infrastructure and Data Centre Market Review - Key infrastructure projects, including the Lagos–Calabar Coastal Highway and the Lagos Green Line Rail Project, are advancing, enhancing connectivity [57][63]. - The data centre market in Lagos is valued at approximately $1.4 billion, indicating strong investor interest and capacity additions [59][63]. Port Harcourt Real Estate Market - Port Harcourt's real estate market is driven by the oil sector, with residential demand growing at an estimated 12-15% [65][87]. - The retail sector has expanded significantly, driven by a rising middle class and consumer preferences for modern shopping environments [67][87]. - Industrial land prices have risen 10-20% over three years, with demand for warehouses increasing by about 25% year-on-year [74][87]. Abuja Real Estate Market - Abuja's real estate market is characterized by high demand and strong capital appreciation, with average property prices projected to rise by 10-15% annually in prime areas [81][98]. - The market is shifting towards integrated, technology-enabled commercial spaces, reflecting evolving tenant needs [85][98]. - The persistent housing deficit and urbanization are driving demand for middle-to-low-income housing in satellite towns [92][98].

Residential Development Land Index Subdued land market as prices soften Annual % change Source: Knight Frank Research PCL GREENFIELD LAND URBAN BROWNFIELD LAND 25% 20% 15% 10% 5% 0% -5% -10% -15% -20% -25% Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 Dec-24 Mar-25 Jun-25 Sep-25 Dec-25 48% Q4 2025 The Kni ...

Investment Rating - The report indicates a stable but cautious outlook for Kampala's property market entering 2026, with long-term fundamentals remaining supportive, particularly for industrial, suburban office, and convenience-led retail assets [9]. Core Insights - Kampala's real estate market showed resilience in H2 2025, driven by macroeconomic stability, contained inflation, and sustained infrastructure investment, with economic growth strengthening to 6.3% in FY 2024/25 [4][12]. - The residential sector experienced modest softening, particularly in prime expatriate neighborhoods, due to increased apartment supply and shifting tenant demographics [5][54]. - The office sector transitioned into a tenant-favorable cycle, with rising vacancy levels in older buildings and stable rental rates for Grade A+ offices [6][78]. - The retail sector remained resilient, supported by strong footfall growth, although average spending per visit declined [7][100]. - The industrial sector outperformed all asset classes, with occupancy levels consistently above 80% and firm rental rates driven by record coffee exports and preparations for oil production [8][9]. Economic Overview - Economic growth rate for FY 2024/25 was recorded at 6.3%, with inflation remaining below the Bank of Uganda's target of 5% [10][15]. - Uganda achieved a Balance of Payments surplus of US$2.37 billion for the year ending October 2025, the highest in over 15 years [11][14]. Residential Sector Summary - The prime residential market saw a decline in rental rates for two-bedroom and three-bedroom units by approximately 10% and 9% respectively, with occupancy levels stable at around 83% [55][60]. - Increased supply of one-bedroom units has intensified competition, leading to downward pressure on rental levels for larger units [56][67]. - The short-let market continued to grow, particularly in secondary neighborhoods, supported by lower entry costs and improved building quality [54][69]. Office Sector Summary - The office market faced rising vacancy levels, particularly in lower-grade buildings, with Grade A+ rents remaining stable at approximately US$18 per square meter [79][80]. - Demand for smaller office spaces remained strong, driven by startups and SMEs adapting to hybrid working models [88][92]. - The supply pipeline includes over 200,000 sqm of office space expected to be delivered over the next two years, despite a slowdown in new developments due to political uncertainty [91][94]. Retail Sector Summary - Retail footfall increased by 15% year-on-year, although average spending per visit declined by 1% [105][111]. - The transition from informal trading to formal retail developments is evident, with suburban retail markets gaining traction [102][100]. - International brands outperformed smaller retailers, benefiting from stronger brand recognition and structured promotional strategies [113][112].

Investment Rating - The report indicates a solid investment activity in both semi-industrial and logistics segments, with semi-industrial investment totaling €333 million in 2025 and logistics investment reaching €1.05 billion, surpassing long-term averages [35][40]. Core Insights - The Belgian industrial market is experiencing a watershed year for investment, driven by strong fundamentals and a resilient occupier base, despite modest GDP growth forecasted at 1.1% for 2026 [3][4]. - Semi-industrial demand has strengthened significantly, with total take-up in H2 2025 reaching 720,000 sq m, an 88% increase compared to the previous semester [12]. - The logistics sector remains subdued, with total take-up of 674,000 sq m in 2025, the lowest annual total in recent years, although the number of transactions increased to 53 from 35 in 2024 [15][16]. Summary by Sections Economic Overview - Belgian GDP growth is projected to be modest at 1.1% in 2026, with inflation expected to decrease to 1.8% [11]. - Employment is anticipated to grow by 35,000–40,000 jobs in 2026, while the unemployment rate is expected to rise slightly to 6.2% [9][10]. Semi-Industrial Market - Total take-up for semi-industrial space in 2025 was 1,103,000 sq m, with H2 2025 accounting for 720,000 sq m [8]. - Prime rents for semi-industrial space have increased to €85/sq m/year, with an average rent of €61/sq m/year [27]. - Investment activity in the semi-industrial segment was robust, with €159 million transacted in H2 2025 [35]. Logistics Market - Total logistics take-up in 2025 was 674,000 sq m, with H2 2025 accounting for 386,000 sq m [15][21]. - Prime rents for logistics have risen to €75/sq m/year in Greater Brussels, with average rents increasing to €63/sq m/year [28][30]. - Investment in logistics reached €463 million in H2 2025, bringing the full-year total to €1.05 billion, indicating strong interest from both international and domestic investors [40][41]. Occupier Trends - The semi-industrial segment saw a notable increase in demand, with own occupier purchases making up 51% of take-up in H2 2025 [12]. - The logistics sector is facing challenges, with a structural crisis in the last-mile transport sector leading to a significant number of bankruptcies [22][23]. Future Outlook - The development pipeline for semi-industrial space remains active, with at least 332,000 sq m expected to be delivered by 2029 [32]. - In logistics, a further 632,000 sq m is scheduled for delivery by 2028, indicating ongoing demand despite current market challenges [33].

Investment Rating - The report indicates a favorable outlook for the Melbourne CBD office market, with expectations of future rental growth supported by a contraction in development [1]. Core Insights - Melbourne recorded its highest annual net absorption since 2018, with a total of +29,475 sqm in 2025, marking the first positive annual result since 2020 [3][25]. - The vacancy rate in Melbourne's CBD rose to 19.0%, primarily due to the completion of several largely vacant refurbished assets [6][36]. - Prime net face rents increased by 5.2% in 2025, the highest growth in three years, with significant increases in the Eastern Core [11][48]. Demand - Tenant demand accelerated in 2025, with net absorption reaching +29,475 sqm, driven by a flight-to-quality trend where prime net absorption totaled +40,070 sqm [25][28]. - The Professional Services sector was the most active in leasing, accounting for 31% of total deal volume [28]. - Robust lease requirement volumes were noted, with 210 CBD lease briefs released, totaling over 300,000 sqm of active requirements [27]. Supply - The CBD vacancy rate increased due to the reintroduction of major refurbished assets, with the Eastern Core experiencing a rise in vacancy to 18.0% [36]. - Development is expected to slow markedly in 2027, with only two major developments forecasted beyond 2026, leading to a projected fall in supply and upward pressure on vacancy [38]. Rental Growth - Prime net face rents in Melbourne's CBD rose by 5.2% in 2025, with the Eastern Core seeing a 10.4% increase [11][48]. - Despite growth in other precincts, a significant pricing gap remains between the Eastern Core and the broader market, with rents averaging $1,010/sqm in the East compared to $503–$747/sqm in other areas [48]. Investment Market - Investment volumes increased by 33% in 2025, supported by major CBD transactions, with prime yields averaging 6.8% [56]. - The report highlights that as yields stabilize, transaction volumes are expected to continue to rise [56]. Southbank Update - Prime net face rents in Southbank averaged $692/sqm, remaining flat quarter-on-quarter but increasing 2.5% year-on-year [64]. - Southbank recorded a total vacancy rate of 15.0%, outperforming most Melbourne CBD precincts [65].

Brisbane CBD State of the Market Sales lift in Q4 as tenant demand and rental growth remain firm Q4 2025 Brisbane CBD prime rents and incentives $/sqm gross rent (LHS), % incentive (RHS) 0% 10% 20% 30% 40% 50% 200 400 600 800 1000 1200 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23 Jan-24 Jan-25 Jan-26 Incentive Gross Effective Rent Gross Face Rent Source: Knight Frank Research Brisbane CBD Secondary rents and incentives $sqm gross rent (LHS), % incentive (RHS) 25% 30% 35% 40% 45% 50% 0 200 400 600 ...

Investment Rating - The report does not explicitly state an investment rating for the Perth industrial market Core Insights - Rental growth in the Perth industrial market has slowed, with prime net face rents averaging $154/sqm in Q4 2025, reflecting a 4.8% year-on-year increase but remaining flat quarter-on-quarter [8] - Land values for small-sized lots have risen significantly, averaging $627/sqm, which is a 12.2% increase in 2025 and a 1.8% increase quarter-on-quarter [8] - Prime industrial yields have remained stable at 6.50% for the ninth consecutive quarter, indicating a consistent market environment [8] Summary by Sections Rental Market - Prime net face rents in Perth averaged $154/sqm in Q4 2025, with a year-on-year growth of 4.8% but no change from the previous quarter [8] - The East precinct remains the most expensive for industrial space, averaging $164/sqm [8] - Incentives for renting have become more common, averaging 9.6% for prime spaces [8] Land Values - Land values for small-sized lots have increased to an average of $627/sqm, marking a 12.2% rise in 2025 [8] - The report highlights a quarter-on-quarter increase of 1.8% in land values [8] Market Yield - Prime industrial yields have stabilized at 6.50%, maintaining this rate for nine consecutive quarters [8] Economic Indicators - Western Australia is projected to experience the strongest population growth among Australian states over the next five years [8] - Economic indicators for WA show a GSP growth forecast of 1.7% for 2025, with a population growth rate of 2.1% [14]