Office Space Across The World

Report Summary:

Global office market performance was positive in 2011 as robust leasing activity in the first half of the year resulted in rising rents in the majority of markets. This appreciation in prime rents was fuelled by growth within Asia Pacific, where rents advanced by 8%.

Elsewhere, rental growth was more muted: the Americas registered a 4% increase and Europe, the Middle East and Africa (EMEA) only a 1% rise. Hong Kong held its position as the most expensive location in the world, with London (West End) remaining in second place and Tokyo in third and all three cities retaining the same positions as held in the previous year. In Asia Pacific, the principal Chinese cities of Beijing and Shanghai led the way in terms of rental growth. Beijing saw rents accelerate by a staggering 75% over the year, subsequently overtaking Shanghai as the most expensive location in mainland China. However, rental performance in Shanghai was far from subdued, as rents rose by nearly 30% over the course of the year. Moscow also witnessed significant rental growth to secure the second highest prime rental rise in 2011. This was largely a result of a notable lack of prime space coupled with robust demand, which pushed rents forward by just over 40%.

Although increasing tenant activity yielded a promising beginning to 2011, the second half of the year saw caution within the occupier sector rise, and activity across a number of markets experienced notable slowdowns. Apprehension rose from both the Eurozone sovereign debt crisis and the US deficit, resulting in demand levels easing and occupiers becoming more restrained when making location decisions. By the close of 2011, this hesitancy had spread to the Asia Pacific region, with caution – particularly from financial services occupiers – becoming increasingly evident in locations such as Hong Kong.

Looking ahead, the occupier market within EMEA is anticipated to remain largely subdued into 2012 with the core cities of London, Paris, Moscow and Frankfurt outperforming other markets. Furthermore, the shortage of prime space in a number of these locations will result in significant location decisions being put on hold until the second half of 2012.

About the Author:

Cushman & Wakefield’s international representation is designed to facilitate the rapid flow of information across borders and is supported by a comprehensive database of market information and regular liaison meetings. This allows for the exchange of local market knowledge and expertise and for the co-ordination of strategy for international investment and locational decision-making.