Cushman & Wakefield, the world’s largest privately-held commercial real estate services firm, issued its latest Global Office Forecast report highlighting the continuing trends of efficiency and quality as key drivers of demand and asking rents.
The global office market is poised for slow steady growth in 2014, while 2015 should be more robust as recovery takes hold and business gains renewed confidence. Jakarta, Dublin and Boston are the regional leaders among the top cities forecasted to see the highest office rental rate growth through 2015.
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 strongly with no new construction underway and double-digit rental growth anticipated.
„Whilst the picture in CEE is generally less positive at the moment, the CEE does tend to lag markets such as Western Europe and the US. Clearly the situation in those markets is starting to look more positive in places and we would therefore anticipate some improvements in the office markets in CEE over the near future,“ said Andrew Thompson, Managing Partner of Cushman & Wakefield Slovakia.
“Occupiers have a clear preference for quality space but many are encountering supply constraints in an increasing number of cities,” said David Hutchings, Partner and Head of Cushman & Wakefield’s European Research Group. “This is pushing rental growth and occupiers will have to move sooner than expected to secure deals on the decreasing amount of quality space that is available.”
This will push rental cost up quite sharply in the most under supplied markets but rental trends will be highly variable through the forecast period with many markets flat and weaker locations having to cut rents further to remain competitive.