by Shane Henson — December 7, 2011—According to the inaugural Jones Lang LaSalle Global Office Index, prime office rents across 81 global markets increased by a further 1.1% during third quarter 2011, despite corporations delaying real estate decisions and facing pressure to drive down costs in the face of economic volatility in the United States and Europe.
Jones Lang LaSalle, a financial and professional services provider specializing in real estate services and investment management, also reports that this was the seventh consecutive quarter where prime rents have risen, which reflects an 8.2% uplift since the bottom of the market in fourth quarter 2009 and a 5.5% increase year-on-year.
“Most major markets are in better shape than they have been since 2008, but investors and corporations are unsettled by current economic uncertainties. Appetite for risk has diminished as investors take refuge in core well-let product and sentiment is starting to impact corporate decision making,” said Arthur de Haast, head of the International Capital Group at Jones Lang LaSalle.
Other key findings of the Jones Lang LaSalle’s Global Office Index include:
- Asia Pacific office markets had the highest rental growth of 2.5% over the last quarter. The Americas followed with an increase of 1.1% in Q3. However, economic concerns in Europe have weighed down on markets and growth has come to a virtual halt, from 2.1% in Q2 to 0% in Q3.
- Real estate markets are diverging, with emerging markets in the BRIC economies demonstrating strong year-on-year performance, with increases in Beijing (+50.6%), Moscow (+41.2%), Shanghai (+23.7%) and Sao Paulo (+20.4%). Other Asia Pacific markets also registered positive growth, including Jakarta (+48%), Hong Kong (+20.6%) and Manila (+20.9%).
- The ongoing strength of the global technology sector meant that Silicon Valley (+60%), Bangalore (+19.7%) and San Francisco (+17.1%) also had positive rental performance. Equally, demand from the commodities sector supported strong growth for the year in Perth (+26.9%).
- The largest quarterly falls in rents were experienced in Mexico City, Brussels, Dublin, Vancouver and Canberra, who all experienced drops between 2 and 4%.
- Real estate markets are diverging, with emerging markets in the BRIC economies demonstrating strong year-on-year performance, with increases in Beijing (+50.6%), Moscow (+41.2%), Shanghai (+23.7%) and Sao Paulo (+20.4%). Other Asia Pacific markets also registered positive growth, including Jakarta (+48%), Hong Kong (+20.6%) and Manila (+20.9%).
