Higher tenant enquiries and more frequent site inspections translated to stronger office leasing demand in Q1 2021. Regional Grade A net absorption rebounded from a low base to hit 9.1 million sq. ft. NFA. The decline in Grade A rents decelerated from 1.2% q-o-q in Q4 2020 to 0.7% q-o-q, bringing the y-o-y fall to 5.0%.
Retailers turned more active in looking for new leasing opportunities. Vacancy was largely unchanged across the region, while rents fell by 0.4% y-o-y, a slower rate of decline than the 2.1% y-o-y drop recorded in the previous quarter.
Warehousing demand remained upbeat, with Asia net absorption reaching 15.6 million sq. ft., the highest first quarter total in recent years. Most major markets in the region continued to report low vacancy. Rents rose by 0.7% q-o-q.
Asia Pacific commercial real estate investment volume totaled US$26 billion in Q1 2021, an increase of 12% y-o-y. Investment sentiment continued to strengthen over the quarter, with most markets observing an increase in enquiry levels.