INTERVIEW
Office space demand to grow to 1.35b sq ft: C&W India is next to China in becoming a powerhouse in the Asia Pacific region.
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ore office space will be required in Asia Pacific over the next ten years than the previous decade, despite the challenge from work from home arrangements, forecasts Cushman & Wakefield CEO for Asia Pacific, Matthew Bouw. A total of 1.35 billion square feet of office space is projected to be required in the next decade across the Asia Pacific region, a 66% increase from the 800 million absorbed by corporate occupiers over the last decade. It’s a phenomenal figure especially when you consider just how busy the region’s skylines have been with construction cranes over the past decade. And they’re bound to be busier in the next. “55% of the office construction worldwide is in APAC and construction is already underway. From now till end 2024, we are anticipating an average of 120 million square feet of office space to be built each year,” Bouw said. Demographics, economics and other factors which are impacting the office sector will also drive activity across all real estate asset classes this decade. Across the world, 1.94 billion square feet of Grade A offices were added between 2010 and 2020. From that figure, APAC had the largest share at 42%. Bouw said that this is larger than the Americas and Europe. “All of those trends in our Asia on the Rise report population growth, GDP growth, middle class consumers, working age population, growth in knowledge workers will have an impact on office demand. The world is forecast to require 2.1 billion square feet of office this decade and of that, 65% will be in APAC.” Bouw said that the growth of the real estate sector in APAC until 2030 will generally be driven by the projected growth of the country economies within the region. “If you think about the world economy between now and the end of the decade, it is going to grow from US$87 trillion to about US$114 trillion. Asia Pacific is going to lead the growth,” he said. “It will lead not only as the largest regional economy in the world, but also as the fastest growing regional economy in the world. By the end of the decade, the Asia Pacific economy as a region will make up 40% of the world’s overall GDP output,” he added. Leading this growth are three primary areas in APAC: China, India, and the Association of South East Asian Nations or ASEAN. “The Chinese economy is forecast to grow by about US$8 trillion by the end of this decade. That equates to 59% growth in the Chinese economy, growing from about US$14 trillion to US$22 trillion. That is the equivalent of adding the econo14
REAL ESTATE ASIA | Q1 2021
Cushman & Wakefield CEO for Asia Pacific, Matthew Bouw
If you think about the world economy between now and the end of the decade, it is going to grow from US$87t to US$114t. APAC is going to lead the growth
my of France three times over,” he said. “Contrasting it to the US, the US economy is estimated to grow 25% in that time. As a result, the Chinese economy is quickly catching up to the US as the world’s largest economy,” he added. India is seen to improve in the next decade, alongside ASEAN countries such as Indonesia, Vietnam and the Philippines. “India is currently ranked the seventh largest economy in the world. By the end of the decade, it will ascend to be the fourth largest economy, forecast to grow by an astonishing 67%,” Bouw noted. “The third powerhouse economy is ASEAN that is made up of a bloc of 10 countries with fast-growing South East Asia economies like Indonesia, Vietnam, and the Philippines. This bloc has a total population of 667 million and its GDP is forecast to grow at around 4.6% per annum over the course of the decade,” he added. “This is impressive when you compare the forecast annual GDP growth for EMEA is 1.6% and the Americas at 2.1% for the same period.” India as the next big powerhouse Bouw highlighted India as one of the more promising countries that is likely to grow rapidly in the next decade. Whilst China will still lead by a large mile, India is projected to become the third biggest contributor to growth in the APAC
