Office Space Across the World 2014

The full report

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Global Summary & Outlook

Most Expensive Locations

Americas Overview

Asia Pacific Overview

EMEA Overview

Global Office Contacts

 

 Global Summary & Outlook


Global office rents moved up by 3% in 2013, which is the third consecutive year of a similar rental performance. While all three regions overall witnessed a relatively slow pace of rental growth over the year, certain areas – such as Africa and the Middle East – saw a more buoyant rental market, with prime rents up by as much as 10% in certain locations.
 
 Office Space Around the World 2014 Global Outlook
   
 

Most Expensive Locations

 
 Office Space Around the World 2014 - Most Expensive Locations
   
 

Americas Overview

 
Although rental performance across the Americas barely changed in 2013, there was a notable polarisation in performances between North and South America. Regional rental growth was fueled by increases in both the USA and Mexico, where prime rents moved up by 4% and 6%, respectively. Most South American locations, however, saw prime rents decline in 2013, with Colombia, and 2013’s frontrunner – Brazil, experiencing the largest year-over-year declines. Consequently, this divergence between the two regions gave way for New York City (Madison/5th Avenue) to retake the title of the most expensive market in the Americas region, pushing last year’s number one, Rio de Janeiro (Zona Sul), into second place.

 Office Space Around the World 2014 Americas' most expensive locations
Looking ahead into 2014, with the foundation for stronger conditions in 2014 set in place, it is anticipated that the USA will continue to propel the region in terms of a buoyant economic growth. This should in turn have a positive effect on occupier demand and consequently help retain the upwards pressure on prime rents. In South America, the burgeoning markets of Colombia, Chile and Peru are anticipated to sustain any growth for the area. However, the outlook for Brazil – one of the key markets for the region is uncertain, with factors such as high inflation and an upcoming election becoming possible obstacles to future growth. As a result, business confidence and occupier demand are both expected to suffer from this and remain subdued, which could see further falls in prime rents over the course of the year.  Office Space Around the World 2014 Americas Cities with largest rental growth
 

Asia Pacific Overview

 
Rental performance throughout Asia Pacific in 2013 largely followed the subdued pattern seen in 2012, with prime rents moving up by 2%. Despite easing in the first half of the year, the economic climate across the region improved as the year progressed, with China and Japan expanding. However, these positive performances were not enough to sustain regional growth, and consequently, many occupiers were notably cautious over the majority of the year.

 Office Space Around the World 2014 APAC most expensive locations
A slow performance has become the new norm for Asia Pacific; however, with regional GDP growth still hovering around 5.0-5.5%, Asia Pacific is still ahead of the other regions as seen in 2013. For 2014, a similar trajectory is anticipated, with slow but steady conditions akin to the previous year supporting occupier demand across the region. The key economies of China, Japan and markets in Southeast Asia are anticipated to drive the region forward, with office market demand in particular gaining momentum over the year.  Office Space Around the World 2014 APAC cities with largest rental growth
   
 

EMEA Overview

 
After five years of financial and economic uncertainty within Europe, the region finally began to see some stability return to the market as 2013 progressed, albeit with notable differences between markets. However, this improvement in economic conditions arrived too late to drive much growth in prime offices rents, with an overall regional uplift of just 3%. Nevertheless, this is the highest regional rise seen since 2008, before the depths of the economic downturn.

 Office Space Around the World 2014 EMEA most expensive locations
Looking ahead for the region, the overall lack of high quality space is expected to push many occupiers towards moving sooner rather than later, as they look to secure deals on the limited supply of quality space that is available. With the development pipeline anticipated to continue at low levels until the latter part of 2014, prime rents are likely to remain under pressure. Overall it will still be a mixed picture across Europe on a market-by-market basis in terms of rental performance, but growth across the region is expected to be slow but steady as confidence gradually returns.  Office Space Around the World 2014 EMEA cities with largest rental growth