According to a report by Jones Lang LaSalle called "Timing is Everything - Making Quality Decisions in Rising Markets", tenants need to create leverage by playing the market cycles, timing their lease renewal strategies and carefully negotiating their review clauses to get maximum advantage.

Jeremy Sheldon, international markets director at Jones Lang LaSalle, said all Asian markets were positioned in the upturn stage of the rental cycle, with rents forecast to increase across all major centres. This poses particular challenges for tenants who have to negotiate rents in a rising market.

Given the typically shorter market cycles compared to the United States, Europe and Australia, Asian rental swings can be extreme.

For example, average grade-A rentals in central Hong Kong rose by 53 per cent during 2004, with a further 45-per-cent increase in the first half of 2005.

For a 2,000-square-metre Hong Kong tenancy, this added up to a US$1.6-million (Bt62 million) increase over a typical three-year lease.

Therefore, an understanding of market conditions is important in negotiating the initial rent and the rent review patterns.

 "In cities where rents are forecast to grow over the next five years, tenants should seek to renew leases as soon as possible and consider strategies to lock in rates for this upward cycle.

"The greatest rental increases are in Tokyo, Seoul, Singapore and Bangkok, where tenants face the strongest imperative to act quickly. Tenants should also consider action in Jakarta and Beijing," said Sheldon.

Caroline Murphy, head of markets at Jones Lang LaSalle, Thailand, added that the Bangkok office market was in an upward cycle.