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A recent CBRE analysis has indicated that rising economic rents across key Asia Pacific markets have made office leasing increasingly expensive for occupiers, prompting many corporates to reassess the economics of building their own premises versus continuing to lease. While the 'build' option had long appeared capital-intensive, recent rent escalations in prime markets such as Mumbai, Ho Chi Minh City, and Manila have tipped the scale in favour of ownership for some. This shift is reshaping long-term real estate strategy discussions among occupiers with substantial space requirements.
CBRE's newly released regional study has highlighted an emerging strategic shift in the Asia Pacific office market, where rising economic rents have begun to nudge occupiers towards re-evaluating the financial prudence of owning versus leasing corporate office spaces. The report analyses economic rents across more than 20 prime office locations and suggests that, in some high-growth markets, the build option may now present a stronger long-term value proposition. Advertisement
The analysis shows that cities such as Mumbai, Ho Chi Minh City, and Manila are witnessing economic rents that are increasingly comparable to, or even exceed, the cost of self-development amortised over time. While these cities still show leasing as a more viable option in purely financial terms, the gap between rent and build cost has narrowed significantly-particularly for occupiers requiring large-scale, long-term operational bases.
In contrast, more mature office markets such as Tokyo, Singapore, and Sydney continue to favour leasing due to high land and construction costs, coupled with more established institutional ownership structures. However, even in these cities, occupiers with specific operational or ESG goals are beginning to explore owner-occupied solutions.
CBRE noted that the decision to buy or build is often dictated not just by cost calculations but also by the occupier's long-term business vision, branding requirements, and control preferences. Flexibility, speed to market, and capital deployment strategies continue to make leasing attractive, but ownership is increasingly being seen as a hedge against rental inflation and future volatility.
While leasing remains dominant in institutionalised markets, the ownership model is gaining traction among corporates seeking control, long-term stability, or insulation from rising rents. With workplace needs and business models evolving, this shifting calculus between build and buy is likely to play a larger role in future office space strategies. The trend also hints at a deeper rebalancing of power between occupiers and developers across emerging and developed office markets.
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