Commercial property owners should be encouraged by CB Richard Ellis’s (CBRE) Global Office Marketview, which shows an upturn in worldwide office rents year-on-year during the first quarter of 2011.
The commercial property services firm sees the 4.3% increase across all regions as an ‘encouragement to property owners that have endured seven quarters of consecutive Index declines’. This follows on from the 2.4% jump registered in Q4 2010.
Figures show the shortage of new commercial property space in London is a trend replicated in the Americas and the Europe, Middle East and Africa (EMEA) region. This contrasts with the Asia-Pacific region, where there will be a record-breaking near 9% growth in new supply. The EMEA will see completions rise in 2012 in London, Warsaw, Hamburg, Vienna, Milan and Stockholm, says CBRE.
The continued troubles in the US economy are reflected in its commercial property vacancy rate of 16.4%, although this is predicted to contract as the economy and job market improve. This compares to Asia’s 10.3%, a reduction from 13.5% in Q4 2010.
Despite the natural disasters that hit the Asian region earlier this year, corporate expansion and the continued demand for exports and domestic consumption were found to be the major drivers of interest in prime commercial property space in Q1 2011.
Take-up in EMEA offices was down by more than 20% compared to Q4 2010. Gross leasing in major European cities came to 25.8m sq ft. This was a 14% year-on-year drop, which has been attributed partly to seasonal effects.
The EMEA region is reported to have the least volatile and lowest vacancy rates at 9.2%, although this is qualified with a reference to the 6.9% ‘trough’ of Q2 2008. CBRE concludes that the ‘current market remains soft in the aftermath of the global financial crisis and in the midst of the sovereign debt crisis’.
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