A new report by Colliers “International Global Office Research Report" indicates that Europe, China and the United States, after a period full of challenges, reached a period of stabilisation, although some markets are still experiencing difficulties.
Interestingly, the cities that were, are or will be hosting the Olympic Games, held the lowest percentage of being unoccupied in 2012 -Rio De Janeiro (2.2%), Beijing (3.5%) and London (5%). Rents in Rio are three times higher than anywhere else in Latin America and it looks like that will continue with the upcoming Olympics and the World Championships, the rising trend will be maintained - said Mark Charlton, Head of Market Studies and Forecasts at Colliers International.
The Leading Global Markets in Hong Kong, London and Tokyo remain the most expensive places when it comes to rental costs, with at rate of $154.78 in Hong Kong, $143.14 in London and $99.29 in Tokyo. Despite the increase in costs in London of almost $10 and a similar size decline in Hong Kong, the ranking leader still remains the most expensive place to rent an office space. When it comes to capitalization rate for objects of types of prime, Hong Kong once again found itself on top of the ranking list of the lowest global rate of capitalisation of 2.53%. Subsequent positions included Vienna with 3.5% and Zurich with 3.8%. These low capitalization rate due to a large demand from investors for a limited amount of high-quality goods. Investors continue to choose these markets due to the perception of relative stability and the status of the "safe harbor" - adds Mark Charlton.
Despite the remoteness of the spectrum of the euro zone, the European office market is currently slowing down. The increase was recorded in the Northern European countries such as Germany or the Scandinavian countries, while has declined in the South European countries such as the Central and Eastern European markets.
When it comes to the Polish office market,it is still showing high development activity. According to the forecasts it showing that by 2013, the developers will complete the projects with a total area exceeding 0.5 million SQ/m. In the view of the significant resource growth of the vacancies, will increase the rate of unoccupied spaces in the major markets, which at the end of the first quarter of 2013, amounted to 10.2%, it will continue the trend. Demand for office space will remain stable, similar to the results achieved in 2012 -notes Ewa Grudzien, an Analyst for The Market Research and Consultancy at Colliers International.
The United States and Canada
In the United States and Canada, there is an increase of employment in the offices, which helped decreased (about 14%) of unoccupied offices, in the first quarter of 2013. Also a strong rebound on the market in the sale of Real Estate was noted, which will affect positively the office market in the suburbs of the United States. The service providers open offices, in order to increase employment and to support new settlements, particularly in places, which have been heavily affected by the crisis, such as Phoenix, Las Vegas and parts of Florida.
Mexico, Mekin, Sydney, Mumbai
In Mexico, the increased trend in the construction industry, remains. In 2012, 20 new buildings were constructed and finished, while 54 are under construction. Experts predict, that within the next 5 years the office space in Mexico City will increase about 3 million sq.m.
In Beijing in the second half of 2012, the loss of interest in office space was reported, but the general rental rates increased by almost 20 per cent, the analysts assume that by the rest of the 2013 year the demand will remain stable.
In Sydney and Melbourne, domestic investment doubled since 2011, now representing 78% of the total investment. The rental market is still noticeable slowing down, but there is also decrease in percentage of unoccupied space, a positive absorption and growth of the rental market can be noticed. In Melbourne, the lack of confidence in the market has caused a drop in demand and decrease the involvement of the tenants. The Colliers Experts predict though an increase in demand in 2014.
In Bombay,despite precautionary tenants,the absorption of the surface increased, in 2012. The demand was driven by the banking sector, financial, insurance and IT. In 2013, the tenants interest will remain stable.Download PDF