The costs related to lease of office space as well as work place density rate (number of employees on a given area) significantly increased in 2017. Companies all over the world aspire to achieve maximal productivity in order to provide working places to more and more employees and use their space in the best possible way.
The new ways of performing work as well as the development of technologies can contribute to changes in the rankings in the next years. In comparison to banks or financial institutions, companies of new generation are less connected with the above mentioned cities. New technologies allow to work from any place in the world which leads to some changes in company’s mode of operation. Office buildings often play a quite different role than usual in the area of providing proper conditions to cooperation.
Hong Kong and London are definitely the most expensive office markets, however, in the digital era, smaller cities start to compete with them in other way than in the industrial era. Locations such as Stockholm, Austin and Seoul also move up in our ranking. For instance, Austin occupied the 21st place in this year's ranking as it still offers lease costs which are 40 per cent lower than in the Silicon Valley, even though this city has already become an important technological hub.
While facing increasing post maintenance costs, the maximally effective use of personnel through providing the working environment, which helps to gain and maintain the most talented employees in the current conditions of global competitiveness, is of great importance for companies. A turning point can be both too much density and too small accessibility of space for common work. In both cases, employees can have some difficulties with performance of their duties. Due to stronger and stronger competitiveness between locations and cities, it is necessary to provide conditions which favor well-being to users and employees – says Sophy Moffat, Author of this report, Research and Analysis Department, EMEA, Cushman & Wakefield.
According to the report, we can expect some slight changes in lease costs all over the world due to bigger interest of employees and companies in emerging economies. The interest of companies from emerging countries on the list of Fortune Global 500 will increase up to over 45 per cent by the end of 2025 in comparison to only 5 per cent in 1990.
Due to the maintained strong demand among tenants in Warsaw, the vacancy rate still decreases and currently it amounts to 12.9 per cent. We envisage its further decrease in the following year due to the forecasted lowest supply of new office space from 2011. The increase in rents, however, is not so possible mainly because of a big number of projects for the years 2019-21 – says Richard Aboo, International Partner, Director of Office Space Department in Central and Eastern Europe, Cushman & Wakefield.