Emerging Markets Serviced Office Review 2013
Report provided by Instant
The serviced office sector in the emerging markets now represents 12% of the global market, an increase of 1.25% over the previous year. In the past 12 months, the sector within these markets has increased by 21% by adding 124 new centres. As of September 2012, there are 714 centres in 110 cities throughout 59 countries in Latin America, Africa, and portions of Asia, Europe and the Middle East. Over the next 5 years, Instant forecast that the number of centres in the emerging markets will more than double.
Emerging markets are broadly defined as countries that are experiencing rapid economic growth and industrialisation; however, the criteria for determining which countries are classified as emerging markets is largely open for interpretation. Since the 1980s, analysts from a wide variety of organisations, ranging from the International Monetary Fund to The Economist magazine, have established their own criteria and compiled lists of more than 50 countries that have been identified as emerging markets. While the selection criteria and inclusions vary from list to list, there
are several key countries that will shift the world’s economic balance over the coming years.
By 2025, the World Bank predicts that the economies of Brazil, Russia, India, China, South Korea and Indonesia will account for more than half of the world’s total GDP growth. Undoubtedly, it is in these countries where global corporations will look to increase their market share. In addition to these mega-economies, companies are also focused on other high growth and frontier markets. Whilst some of these countries may not be classified as emerging markets, globalisation has placed these developing and resource rich nations on the radar. For many companies
looking to enter these markets, serviced offices will serve as the platform from which to establish an initial presence.
In order to accommodate demand for flexible office space while mitigating the risks for companies looking to enter these new markets, there is a push for serviced office providers to be among the first pioneers to establish themselves ahead of anticipated demand. While there is significant risk in doing so, the providers that do are usually able to command some of the highest workstation rates in the world. Due to the complexities of unfamiliar laws and cultures, companies and individuals with a keen understanding of the local market have been some of the first to establish serviced office centres. Recently, many of the larger, more established providers have recognised the benefits of entering these markets early and have set out ambitious expansion plans.