Asia Pacific office market set for strong growth in 2025, driven by surge in demand

SINGAPORE: The Asia Pacific office market is poised for significant growth in 2025, with new data from Colliers highlighting a strong surge in demand across key markets.

Robust growth

According to Colliers’ Asia Pacific Office Market Insights Q3 2024 report featured in Real Estate Asia, office demand in the region surged by 10.7% year-on-year in the third quarter of 2024, reaching 2.2 million sqm.

This robust growth signals a promising outlook for the coming year.

The demand spike was particularly notable in countries such as India, Australia, New Zealand, and Singapore, where office leasing activity saw an annual increase of over 30%.

These markets are emerging as key drivers of the Asia Pacific office sector’s recovery, as companies look to expand and upgrade their office spaces.

Overall, the vacancy rate for offices across major APAC markets stood at 14.3% in Q3 2024, with 212.2 million sqm of office space available.

Supply is expected to rise further in the next quarter, with large-scale project completions across the region’s biggest markets.

Rental rates to remain stable

Mike Davis, Managing Director of Occupier Services at Colliers APAC, shared a cautiously optimistic forecast for the short term, despite ongoing market uncertainties.

He emphasized that office demand in the region would likely continue to grow modestly, with rental rates expected to remain relatively stable.

“The APAC office market is on track for sustained growth as we head into 2025 and beyond,” Davis said. “The evolving understanding of what makes a workplace valuable will drive this growth. Companies are increasingly focusing on productivity, sustainability, and innovation when selecting office spaces.”

The Q3 2024 surge in office demand reflects a broader shift in the market, with businesses seeking not just larger spaces, but environments that support both productivity and sustainability.

Developers are responding by emphasizing green certifications and sustainable upgrades, indicating that the APAC office market is evolving towards a more resilient and robust future.

As companies continue to prioritize high-quality, adaptable, and eco-friendly workspaces, the Asia Pacific office market is set for an exciting and transformative year ahead in 2025.