Beijing is the world’s fastest-growing market for office rental rates.
According to a new Cushman & Wakefield global office market research, Asia-Pacific, particularly Beijing, is experiencing a surge in office rents, fuelled by surging demand and increasingly limited supply.
As the Chinese calendar enters the Year of the Dragon, prime office rentals in Beijing have grown by 75% year over year, a higher rate than in 2010 (48%) and the most of any city in the world in 2011. apartments for rent qatar
Beijing has overtaken Shanghai as the most expensive city in Asia for occupiers seeking office space, after only Hong Kong and Tokyo. After Beijing, Shanghai (27 percent) and Singapore (24 percent) were the two fastest-growing rental markets in Asia Pacific (24 percent ).
In terms of total occupancy expenses, Hong Kong remains the most costly city for office space on a worldwide scale, followed by London (West End) and Tokyo. The top three spots stayed the same as previous year. Tokyo was the most popular destination in 2010, followed by London and Hong Kong.
Beijing’s prime office rents increased by more than 70% in 2011.
For the second year in a row, Hong Kong is the most expensive office market in the world.
The Asia-Pacific region saw the greatest increase in rental rates worldwide.
In 2011, the global office market had positive rental growth of 3%, up from 1% in 2010.
In 2011, rents in Asia-Pacific increased by 8%, the greatest rate of growth in the world. New York (Midtown) was the most expensive location in the Americas, moving ahead of Rio de Janeiro to take the top spot in the area, while sliding to sixth place globally this year from fifth last year.
“Rental rate increases has been driven mostly by modest economic improvements in an environment of limited new supply,” said Glenn Rufrano, President and Chief Executive Officer of Cushman & Wakefield, in a statement.
In 2011, office demand improved globally, availability decreased, and rents increased by 3% compared to 2010. (1 percent ). The rise in rents is due to a shrinking supply of Grade A properties in an increasing number of countries. Following a year of dropping rentals in all regions in 2009, last year was the second straight year of positive rental increase.
The recovery, however, is limited to prime office space and most noticeable in important gateway cities. While the year started out strong, global economic uncertainties caused a decline in lease activity in the third quarter, with a delayed rebound predicted through 2012.
Sao Paulo and Brasilia had the largest office rental growth in the Americas in 2011, with rises of 24 percent and 21 percent, respectively. The most costly location, New York (Midtown), saw a 4% increase in rents. Rio de Janeiro’s remarkable rental increase in 2010 (almost 50 percent) was not duplicated last year, with prime office rates falling by 8% throughout the city. As a result, Rio de Janeiro lost ground to New York as the most expensive office market in the region in 2011.
In 2011, occupational demand in the Americas was high overall. On the heels of a renewed boom in the technology business, some markets saw exceptional growth, most notably San Francisco, which experienced a 20 percent increase in rental levels. As a result of the rise in technology, healthcare, and energy, other cities such as Toronto and Houston performed well.
Europe is a continent that has a
In 2011, Moscow saw the greatest increase in rentals of any European market (41%), making it the fourth most expensive office location this year. Oslo had the second-highest rental growth (15 percent ). For the second year in a row, London’s West End was the most expensive in Europe and the second most expensive internationally for occupiers seeking office space, with a rental increase of about 8%.
While Europe’s overall economy faces headwinds, Moscow, Frankfurt, Munich, Paris, Istanbul, Stockholm, and London are likely to outperform other European markets over the next one to two years, at least in early 2012.
Cushman & Wakefield’s Global Research Group’s Barrie David stated, “Despite economic difficulties, global office rental performance was mainly favorable, with most nations experiencing growth in the previous year. However, given the growing caution and uncertainty as the year continued, the forecast for 2012 is for more restrained growth, with occupiers remaining in the driver’s seat.”
Cushman & Wakefield’s Hong Kong Executive Director, John Siu, observed, “In the second half of 2011, the credit crisis in Europe had a significant impact on the Hong Kong office market, particularly in Greater Central (CBD). Banking and finance occupiers, in particular, have become wary about expanding and relocating their offices. As a result, landlords are more prepared to provide additional rental incentives in order to keep current renters and attract new ones. Over the next 12 months, rents in Greater Central are likely to drop by 10% to 15% “a few months.”
Cushman & Wakefield China’s Managing Director, Andy Zhang, stated on the Chinese office market “In 2011, we witnessed an increase in office rentals in most major Chinese cities. China’s enormous urbanization and robust economic growth will continue to increase demand for office space. Beijing and Shanghai are the most developed and international office markets in the world, and they will drive rental growth. With a single-digit record low vacancy rate and little quality supply expected in the next years, we predict Beijing and Shanghai landlords to maintain their market position in 2012, albeit rental growth will moderate. Tenants must have a plan in place to get through this period of high rent and low vacancy.”
Guy Taylor, Cushman & Wakefield’s Head of West End Office Agency, stated, “Businesses looking for space in the West End will have fewer options than in the City of London due to a scarcity of available space. Many of these tenants are less concerned with location and are becoming more price sensitive. They will explore good quality low-cost space in various places, as long as it is appealing to employees. Despite the fact that decision-making is being delayed as a result of the economic downturn, new inquiries are still being received as a consequence of the West End’s enduring attraction.”