A new MarketView report released by commercial real estate services firm CB Richard Ellis has shown office space rental fees have increased worldwide, with the CBRE Global Office Rent Index having surged 4.3pc year on year in Q1 2011.
MarketView analyzes global office markets across Asia Pacific, Europe, Middle East and Africa (EMEA) and the Americas, which include global office development and construction, vacancy rates, rental cycles, key market snapshots and regional office summaries.
Raymond Torto, CBRE’s Global Chief Economist, said: “While global and regional rents have not returned to pre-recession levels, the robust 4.3% year-over-year increase provides encouragement to property owners that have endured seven quarters of consecutive Index declines. With little in the way of new office space being constructed—particularly in EMEA and the Americas—the CBRE Global Office Rent Index is expected to continue rebounding modestly through 2011.”
The report found the trend of developing new office space to be going downward in EMEA and the Americas, while new supply is growing quickly in Asia Pacific.
With the new supply of office space in Asia Pacific, the record has now grown by about 9pc, which has always been 5pc for many years.
In contrast, EMEA and Americas stocks have inched lower well under 1pc in North America.
Meanwhile, office spaces in London, Warsaw, Hamburg, Vienna, Milan and Stockholm (EMEA region) are slated to rise in 2012, with a change in pattern that slightly deviates from this year’s.
High vacancy rates in USA continue to halt construction of new office space, with other factors including high shadow vacancy, lack of construction financing, and low rents that are not at replacement rent levels.
USA in particular has 16.4pc vacancy rate, the highest so far in the market relative to EMEA region and Asia. But experts see that trend to be going downward, too, in addition to the country’s stock, due to improving economy and job market.
Meanwhile, Asian vacancy rate has declined by more than 300 basis points (bps), from 13.5pc in the fourth quarter of 2009 to 10.3pc in the first quarter of 2011 owing to strong economic growth in the region.
Additionally, the EMEA region vacancy rates sharply dropped 10 bps in the first quarter to 9.2pc, the lowest vacancy rate, though still well higher than its 6.9pc peak in the second quarter of 2008.
In Europe, gross leasing activity has totaled 2.4 million sq. m. in the first quarter, down by 20pc compared to the previous quarter. London, Brussels and Moscow registered a considerable year on year fallers of 14pc compared with the same period in 2010.
Elsewhere, the Asia Pacific has seen the demand for office space in the first quarter of 2011 as being driven by continued corporate expansion, coupled with export demand and domestic consumption.