ASIA PACIFIC Asia Pacific's 2012 economic forecast portends moderate strength, enough to fuel activity in the occupier market. Demand will remain broad-based, with the banking sector continuing to be a vital player, despite an expected decrease in expansion. Continued global outsourcing and information technology spending will benefit India, and pharmaceutical firms are targeting China and India for their growing middle class and large population base as well as Japan, given its large, aging population.

The booming mining sector is also expected to be a critical growth driver in Australia and Indonesia. Asia Pacific's construction pipeline is the highest globally, at more than 250 million square feet. While a significant portion of this new construction is expected to be absorbed, availabilities remain high for projects underway in Guangzhou, Chengdu, Mumbai, Hyderbad, National Capital Region, Ho Chi Minh City and Seoul's CBD, where class-A vacancies are already in the double digits.

The combination of significant new construction and existing high vacancies will create many attractively-priced opportunities for occupiers. Zialcita-Sigrid.jpg Sigrid Zialcita In Tokyo, several new buildings are under construction, but growing demand for office buildings with superior seismic standards will likely stabilize or improve rental rates there, which are currently at a 10-year low. In Jakarta, Shenzhen, Sydney and Melbourne, flat-to-moderately declining vacancy will sustain modest rental increases, while limited new supply will sustain tight office markets in Bangalore, Beijing and Shanghai.

"There are a lot of headwinds as we enter 2012, but we do not expect a repeat of 2009," said Sigrid Zialcita, Managing Director of Asia Pacific Research for Cushman & Wakefield.

"While the region will slow down from the recent period of above-trend growth, the growth rate is still healthy."