23. August 2010 
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EMEA Region gains momentum in global office rental market
The Europe, Middle East and Africa (EMEA) region has gained momentum in the office rental rebound in the past quarter, now closely trailing the Asia Pacific region, which leads the global recovery in this sector. According to the latest Global Office Rental Cycle report by CB Richard Ellis, which measures prime rents, take-up levels and vacancy rates across 17 global markets, almost half of the EMEA region’s markets are now experiencing rental growth or stability.
Paris, in particular, experienced a notable increase in office rents in Q2 2010. Prime rents rose by 3 per cent, and CB Richard Ellis expects further rises over the coming months. This has been triggered by improving demand and a shortage of good quality space in core areas where supply pipelines are starting to tighten.
Office rental markets in Asia Pacific remained the driving force behind global real estate recovery, with most markets in the region either stabilising or moving into the growth phase during the second quarter (Q2) of 2010. Hong Kong, Shanghai and Beijing are at the top of the Asia Pacific market due to a push for office space from the financial sector in central business locations,
Across the Americas, most major markets were still clustered around the ‘rental decline slowing’ position in the cycle at the end of Q2, meaning that rents are still falling but at a slower rate.
Dr. Raymond Torto, Global Chief Economist, CBRE, said: “Despite a generally weaker economic outlook and the possible impacts of significant austerity measures, Europe is only slightly behind Asia in terms of the percentage of office markets registering rental growth.
“The City of London continues to lead the other key global markets in terms of the scale of rental growth seen to date. This is due to increased demand in the financial sector. Furthermore, despite expectations of a slowdown in growth, rents in London’s West-End remained stable in the second quarter.”
Following tentative recovery in Q1 2010, improving consumer confidence and industrial production, as well as signs of increased employment in mature economies are amongst the key drivers for growth. However, the report warns that ongoing government debt problems and concerns over policy responses could mar market outlook for the remainder of the year.
Paris, in particular, experienced a notable increase in office rents in Q2 2010. Prime rents rose by 3 per cent, and CB Richard Ellis expects further rises over the coming months. This has been triggered by improving demand and a shortage of good quality space in core areas where supply pipelines are starting to tighten.
Office rental markets in Asia Pacific remained the driving force behind global real estate recovery, with most markets in the region either stabilising or moving into the growth phase during the second quarter (Q2) of 2010. Hong Kong, Shanghai and Beijing are at the top of the Asia Pacific market due to a push for office space from the financial sector in central business locations,
Across the Americas, most major markets were still clustered around the ‘rental decline slowing’ position in the cycle at the end of Q2, meaning that rents are still falling but at a slower rate.
Dr. Raymond Torto, Global Chief Economist, CBRE, said: “Despite a generally weaker economic outlook and the possible impacts of significant austerity measures, Europe is only slightly behind Asia in terms of the percentage of office markets registering rental growth.
“The City of London continues to lead the other key global markets in terms of the scale of rental growth seen to date. This is due to increased demand in the financial sector. Furthermore, despite expectations of a slowdown in growth, rents in London’s West-End remained stable in the second quarter.”
Following tentative recovery in Q1 2010, improving consumer confidence and industrial production, as well as signs of increased employment in mature economies are amongst the key drivers for growth. However, the report warns that ongoing government debt problems and concerns over policy responses could mar market outlook for the remainder of the year.
