Solid leasing demand helped drive a 22% q-o-q increase in office net absorption to 16.8 million sq. ft. NFA in Q2 2018. Active markets included tier I cities in China, Hong Kong, India, Tokyo and Singapore. Rental growth picked up to 1.4% q-o-q or 4.7% y-o-y, the strongest quarterly gain since Q3 2011.
Steady retail sales growth supported an uptick in retail leasing activity, with broad-based demand recorded, led by the F&B sector. Rents in Asia are starting to grow or recover from the correction, while those in the Pacific are plateauing after a significant increase.
Logistics leasing demand was healthy in Q2 2018, driven by e-commerce and 3PL firms. Upbeat markets included Greater Tokyo and tier I cities in China. Rental growth continued to show strong momentum, rising by 0.8% q-o-q, led by outperforming Pacific markets.
Investment momentum remained strong, with transaction volume rising 28% q-o-q to US$33 billion, supported by the completion of several big ticket deals in Australia and Hong Kong. Property companies were the major buyers, accounting for more than 30% of total acquisitions, including three of the five largest deals.