The latest CB Richard Ellis Group, Inc. (CBRE) Global Office Rent Index showed that the office rentals have increased year over year by 7.4 percent during the second quarter of 2011, the fifth straight quarter the index has risen due to performance in Asia Pacific.
“Although the global economy presented no shortage of economic headwinds during the second quarter of 2011, commercial real estate performed better globally than it did the previous quarter,” said Raymond Torto, CBRE’s Global Chief Economist.
“With limited new-construction in many markets, tenants continued to face a shortage of preferred space, which helped to stabilize or place modest upward pressure on rents.”
The CBRE Global Office Rent Index, which will be published in the Company’s latest Global Office MarketView, shows that the rate of growth still falls well below those reached before the global financial crisis, while the prevailing trend of global rents was broadly improving.
Strong rental growth in Asia Pacific, which recorded a 13.4 percent year-over-year increase in Q2 2011 was said to have driven the improvement in the Index, marking Asia Pacific’s fifth consecutive quarterly increase and the strongest growth rate that the region has experienced since its previous high in the fourth quarter of 2007.
The growth in Asia Pacific was fueled by strong business and occupier sentiment as well as by occupiers’ preference for prime properties of which supply has been limited, CBRE said.
Some positive results emerged in the second quarter of 2011, whether measured year over year or quarter over quarter, for the Americas. The improvement was modest with rents up 1.5 percent year over year.
The CBRE report noted that office rent growth for the Americas suffered a drawback due to a sluggish economic recovery in the U.S., cautious occupier sentiment and high vacancy rates.
In EMEA, rents grew 2.4 percent year over year during the second quarter of 2011, slightly down from the 2.8 percent rise in both the fourth quarter of 2010 and first quarter of 2011.
While EMEA rents recovered from the global financial crisis sooner than those in the Americas, the previous moderation in growth is associated with the continued uncertainty posed by the European sovereign debt crisis, according to CBRE.
“While commercial real estate performance indicators showed signs of improvement in the second quarter, weak conditions in the developed markets have kept global net absorption rates well below pre-recession levels. Asia Pacific is the only region that has reached pre-recession net absorption levels, and with annualized completion rates still relatively low historically, this region is set to experience continued downward pressure on vacancies and upward momentum in rental growth.”
The base period for the indices is first quarter of 2001.
The CBRE Global Office Rent Index was created by CB Richard Ellis Research, consisting of data from 123 cities around the world.