Global offices set to grow in 2014
The global office market is set to grow slowly and steadily in 2014, according to Cushman & Wakefield.
The group's forecast for the international commercial property sector predicts steady growth next year ahead of a "more robust" 2015, as recovery takes hold and confidence builds.
Jakarta, Dublin and Boston are the regional leaders among the top cities forecasted to see the highest office rental rate growth through 2015.
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 per cent through the forecast period, while Dallas is enjoying a resurgence of activity with rents expected to rise approximately 3 per cent 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.
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.
In the Asia Pacific region, more subdued growth should cause leasing conditions to remain less buoyant over the next year with rents expected to advance by 1-2 per cent.
"Reduced occupancy footprints and an upgrade to better quality space are two global trends that show no sign of letting up anytime soon,” 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.”