According to a report released by independent property consultancy Knight Frank, 2014 will be another year in which there will be stronger investment demand for prime office space worldwide. The Global Investment report indicated that improved economic conditions have led to a boost in property investment activity.
Transaction volumes worldwide for commercial properties have added up to US $224 billion in the first six months of this year, an increase of 11.7 per cent over the same period in 2012. A significant portion these transactions can be attributed to the recovery in the US market, according to Knight Frank.
In Europe, sales volumes reached €74 billion during the same period earlier this year. It represented a year on year increase of 7 per cent. Improved activity in Spain and Italy helped to achieve these figures.
In the first six months of the year, the Asia Pacific region saw a year on year increase of 6 per cent on commercial sales volumes to US $56.9 billion. This amount does not include Chinese land deals, which account for most of the activity in the region.
Prime office space in Hong Kong attracts the highest capital value of the major office markets worldwide. Singapore is the next most expensive market in the world.
The outlook for 2014 in prime office markets, based on rents and yields in 10 global cities, is that capital values will rise by an average of 5 per cent. Rent growth is also likely to occur and several cities are expected to benefit from higher rents by the end of next year. Some second-tier cities, like Atlanta, Dublin, and Edinburgh are now receiving more attention from investors.
