|
Global property snapshot
Date published 26 January 2009
The Broll Global MarketView/Office Occupancy Costs Survey together with CB Richard Ellis (CBRE) Research have announced Cape Town, Sandton and Durban among the top 20 cities with the fastest growing occupancy costs worldwide.
Tracking world markets with the highest as well as fastest-growing occupancy costs for the 12 months that ended 30 September 2008, the report shows the average rate of growth for office occupancy costs among the 172 markets monitored in the survey to be 8%, almost double last year's world inflation rate.
According to Dr Raymond Torto, CBRE's global chief economist, "Over the last 12 months, rents and occupancy costs have risen rapidly. However, the rate of change is generally slowing, and in some markets, the pricing some relief direction is down. This turn is rent trajectory will provide some relief to occupiers and angst to owners, but unlike previous downturns, which have occurred simultaneously with extensive overbuilding, the real estate market globally today is in a stronger position to weather the difficulties than in the past."
Asia Pacific was the fastest growing region among the markets in the top 50, at an average rate of 26,2%. Ho Chi Minh Citty, Vietnam was first in the region and second overall, with a 51,4% increase in occupany costs. This is because multi-national corporation tenants have driven demand for the limited supply of prestige prime office buildings in that city up. Ho Chi Minh City's rents largely surged in the fourth quarter of 2007 and the first half of 2008. Perth, Australia, was second in the region and fourth overall, up 45,2%, while Hong Kong's Central Business district (CBD) had the third largest increase in the region and 12th overall, up 29,1%.
Occupany costs in the six Latin American markets that made the top 50 grew an average of 21,5%, with two new cities - Santo Domingo, Dominican Republic and Lima, Peru - making the list. Sao Paulo, Brazil, led the region and was the seventh fastest growing market overall, up 34%. Sao Paulo's occupancy cost increase reflects strong local economy supported by global demand for commodities and a growing middle class. Meanwhile, of the nine North American markets in the top 50 fastest growing rankings, occupancy costs growth rates averaged 14,5%, the slowest of all the regions covered.
In Europe, London's West End remained the world's most expensive office market at $248,66*, and Moscow retained its number two spot at $234,73*. The city of London was next among the European markets and eighth most expensive overall, at $146,61*. In Europe, occupancy costs grew fastest in Moscow and Rome, with increases of 29,7% abd 29,5% respectively.
"European cities still account for over half of the top 50 most expensive global office markets. The fact that Moscow is the only European location that appears in the global list of top ten fastest growing markets, however, reflects the economic climate has slowed occupier actively across Europe in recent months, reducing upward pressure on occupier costs. European markets are expected to experience reduced occupier costs over the course of next year as landlords seek to secure tenants in a tougher business environment," says Richard Holberton, director of Europe, MIddle East and Africa Research from CBRE.
*In local measure
Author: Contruction World
|
