(Source: Commercial Property News)
Tenants have the edge in most of the world’s major office markets, concludes an analysis by CB Richard Ellis Inc. Class A rents are sliding dramatically and vacancy is ticking upwards in nearly every region, according to the study published last week.
Office occupancy costs in 173 global markets declined 2.8 percent in the 12 months ending March 31. That represents a dramatic change in direction from the 12-month period ending September 2008, during which costs grew 8 percent. In the United States, vacancy has increased 130 basis points during the past two quarters. In the 15 European Union countries, vacancy rose 3.4 percent in the first quarter and 4.1 percent year-over-year. Broad cost-cutting efforts among tenants led to increased vacancy in 15 of the 17 Asian Pacific markets during the first quarter.
The findings emerged last week in a report that also features an update on the most expensive office markets. Tokyo’s Inner Central District took first place at $183.62 per square foot, edging out London’s West End by $11 per square foot, according to CB Richard Ellis. Other top 10 markets include Moscow, Hong Kong’s central business district, Tokyo’s Outer Central District, Mumbai, Dubai, Paris, the City of London and Dublin. Midtown Manhattan, North America’s most expensive office market, ranked 21st overall at $68.63 per square foot. Other North American markets among the top 50 most were Calgary (39), Downtown Manhattan (44), suburban Los Angeles (45), Toronto (46), and Washington, D.C. (47).
Read Paul Rosta’s full article “Tokyo is Priciest Market as Climate Favors Office Tenants Worldwide: CBRE” in the CPN (June 8, 2009).