by Shane Henson — December 23, 2013—Global commercial real estate services firm Cushman & Wakefield recently announced the release of its Global Office Forecast 2014-2015 report highlighting the continuing trends of efficiency and quality as key drivers of demand and asking rents.
Key among these trends is the preference for a reduced occupancy footprint and an upgrade to better quality space, said Carlo Barel di Sant’Albano, executive chairman of Cushman & Wakefield.
“The workplace is becoming more complex and inter-related with business performance and objectives, with modern efficient space seen as promoting increased productivity and workplace satisfaction. In certain instances, new construction can achieve both goals,” he said.
The report also highlights trends seen within the major global office markets.
North and South America
Technology and energy continue to be the main drivers of the U.S. real estate recovery. As a result, Boston is expected to see continued strong demand pushing prime asking rents upwards by 22% through the forecast period, while Dallas is enjoying a resurgence of activity, with rents expected to rise approximately 3% annually. Softening near-term demand will result in an oversupply situation in Canada, Mexico and Brazil. Rents will decline modestly in Canada and Mexico, while widespread rental growth in Brazil will not take place until 2016.
The report notes that markets whose tenancy foundations are built on a more traditional mix of sectors, which continue to shrink their occupancy footprints, will continue to move along a slow growth trajectory. Not surprisingly, Washington, DC, is not expected to see a return to recovery until 2015 due to economic difficulties exacerbated by a polarized Congress.
Europe, the Middle East and Africa (EMEA)
Major international cities such as London, Stockholm and Frankfurt have led in the European leasing recovery, but others are now joining in, including some from the formerly distressed fringe. Dublin, for example, has bounced back strongly, with no new construction underway and double-digit rental growth anticipated, the report says.
Asia Pacific
More subdued growth in the region should cause leasing conditions to remain less buoyant over the next year, with rents expected to advance by 1-2%. Rental growth rates will pick up in a number of core and emerging locations led by Tokyo and Manila, where supply risks are limited, upon the resumption of stronger economic growth.
