office space across the world - Cushman & Wakefield

OFFICE SPACE ACROSS THE WORLD 2014 A Cushman & Wakefield Research Publication

OFFICE SPACE ACROSS THE WORLD

A Cushman & Wakefield Research Publication

INTRODUCTION

CONTENTS

Welcome to the Cushman & Wakefield global Office Space Across the World publication for 2014. This report was prepared by the Cushman & Wakefield Research team to provide an analysis of the global office market during 2013, as well as discuss the industry’s main trends for the year ahead. The primary focus of this report is prime office rental performances and occupancy costs across the globe, including a ranking of the most expensive locations across the world in which to occupy office space. The report also provides a more in-depth rental and occupier overview for each region, concluding with a detailed list of market data pertaining to each office location.

Global Summary & Outlook 2

Most Expensive Locations

4

Americas Overview

6

Asia Pacific Overview

7

EMEA Overview

8

Market Metrics

10

Technical Specifications

14

Contacts

15

The information and data provided in this report are based on a comprehensive survey of Cushman & Wakefield’s international offices, and the editors are extremely grateful to them for their time, effort and assistance. The Cushman & Wakefield Research Group provides a strategic advisory and supporting role to our clients. Consultancy projects are undertaken on a local and international basis, providing in-depth advice and analysis, detailed market appraisals and location and investment strategies. For more information on what Research can do for you, please visit the Contacts page of this report (page 15). To gain access to all of Cushman & Wakefield’s research and publications globally, please visit the Research & Insight section of our global website: www.cushmanwakefield.com/research

1

2014


GLOBAL SUMMARY AND OUTLOOK

Global office rents moved up by 3% in 2013, which is the third consecutive year of a similar rental performance. While all three regions overall witnessed a relatively slow pace of rental growth over the year, certain areas – such as Africa and the Middle East – saw a more buoyant rental market, with prime rents up by as much as 10% in certain locations. RENTAL PERFORMANCE IN THE YEAR TO DEC 2013

46%

25%

28%

% of countries showing rental growth

% of countries showing stable rents

% of countries showing rental declines

Average Rental Change 3%

2

THE MOST EXPENSIVE GLOBAL MARKETS The most expensive office market globally was London (West End), which retained its position ahead of Hong Kong in second place. Prime rents in London continued to move up during 2013, bolstered by strong occupier demand and a declining supply of high-quality space. With rents largely unchanged in Hong Kong over the year, the gap in total occupancy costs between London and Hong Kong has, in fact, widened. New Delhi’s Connaught Place fell from fourth position to eighth despite prime rents being unchanged in 2013. This was primarily the result of an appreciation in both the US Dollar and Euro against the Indian Rupee in 2013, causing a shift in New Delhi’s position in terms of global occupancy costs. Similarly, exchange rate fluctuations with the Japanese Yen caused Tokyo to fall behind other comparable markets like Beijing in the overall ranking – despite prime rents in both cities remaining largely unchanged over the year.



ASIA PACIFIC: SLOW BUT STEADY

CITIES WITH THE LARGEST RENTAL GROWTH 900

50

Rent (EUR/sq.m/year)

40 35

600

30 450

25 20

300

15 10

150

% Rental Growth per Year

45 750

5 0

0 Sandton CBD

Durban CBD

Durban La Lucia/ Berea

Quito CBD

Jakarta CBD

RENT

Bangkok Singapore Dublin Cape Town New York CBD CBD Int’l Fin. CBD Downtown Svcs. Centre

RENTAL GROWTH

Rental growth was largely flat across Asia Pacific over the year, with an overall regional rental rise of just 2% in 2013. Economic conditions were more fragile in the first half of the year, although growth in core markets of China and Japan advanced as the year progressed. However, the region is well represented in terms of the most expensive office locations on a global scale. Hong Kong retained its position in second place overall, Beijing came in fourth position and Tokyo in fifth. Asia Pacific’s performance in 2014 is anticipated to be similar to that seen in 2013, with slow and stable demand anticipated to keep rental levels largely unchanged, albeit with incentives becoming more competitive. RENTAL PERFORMANCE IN THE 5 YEARS TO DEC 2013 15

The global occupier market in 2013 was again characterised by caution, as tenants across the globe remained concerned regarding occupancy costs. Indeed, while some tenants were looking to upgrade to more efficient, cost-effective office space, many still sought to consolidate their existing operations. Over the year, occupiers retained a focus on well located, high quality space, and demand for this type of accommodation was steadily rising by the end of 2013. As a result, the options open to occupiers tightened, and almost half of the locations analysed within the report witnessed prime rents increase over the year, albeit marginally in most cases.

10 % Rental Change per Year

OCCUPIER TRENDS

5 0 -5 -10 -15 -20 2009

2010 GLOBAL

2011 AMERICAS

2012 ASIA PACIFIC

2013 EMEA

AMERICAS: A MIXED BAG

EUROPE: FROM MARKET TO MARKET

Coming out of the double-digit expansion seen in 2012, prime rental growth in the Americas region was much more subdued, with an overall regional rise of just 1%. Rental performance in South America in 2013 was slow, with muted growth in the key markets of Argentina and Brazil. Ongoing economic uncertainty in both of these markets caused occupier demand to ease and prime rents to fall over the year. Although both Ecuador and Colombia saw burgeoning demand over the year, it was not enough to offset the rental declines in these larger markets. In the year ahead, South America is likely to face more uncertainty, with economic concerns affecting business confidence in a number of locations, although a steady rise in stability across the region will be seen as North America expands.

In Europe, a lack of high quality space characterised a number of markets, including London and Frankfurt, and with demand in these cities advancing over the year, prime rents were put under upward pressure. Therefore, although the overall regional picture was relatively muted over the year, there were notable differences from market to market. Looking ahead, the rental trend seen in 2013 will continue in to next year, with rents in the large majority expected to see modest growth, with locations such as London and Dublin experiencing more significant rental growth for good quality space.

In the USA, demand levels improved in 2013 as the economy recovered quicker than expected. Over the year, the USA saw strong leasing activity, with business confidence improving as the year progressed. However, rental performances were mixed across the country, with New York (Downtown) and Boston outperforming other markets. The outlook for 2014 is for the USA to continue to see rental levels expand and thus drive the overall regional growth in the year ahead.

“Prime rents in London continued to move up during 2013, bolstered by strong occupier demand and a declining supply of high-quality space.”

3

2014


MOST EXPENSIVE LOCATIONS BY COUNTRY (€/SQM/YEAR) 2014 2013 RANK RANK

LOCATION

OCCUPANCY COST PER SQ. M. PER YEAR

€0 1

London, UK West End

€2,122

2

Hong Kong, Hong Kong Central

€1,432

3

6

Moscow, Russia CBD

€1,092

4

7

Beijing, China CBD

€1,027

5

Tokyo, Japan CBD (5 Central Wards)

€1,003

8

New York, USA Midtown (Madison/5th Av.)

€993

3

Rio de Janeiro, Brazil Zona Sul

€991

4

New Delhi, India Connaught Place

€959

10

Paris, France CBD

€895

9

Sydney, Australia CBD

€844

14

Singapore, Singapore CBD

€803

12

13

Luxembourg, Luxembourg City CBD

€777

13

11

Oslo, Norway CBD

€756

21

Dubai, UAE DIFC

€734

12

Geneva, Switzerland CBD

€718

16

15

Almaty, Kazakhstan CBD

€661

17

n/a

Doha, Qatar CBD

€659

16

Stockholm, Sweden CBD

€593

17

Istanbul, Turkey CBD (Levent)

€572

20

18

Milan, Italy Centre

€556

21

19

Munich, Germany CBD

€540

25

Taipei, Taiwan CBD (Xinyi Planned Area)

€536

22

Amsterdam, Netherlands Zuidas

€506

24

24

Beirut, Lebanon CBD

€505

25

31

Dublin, Ireland CBD (2/4 Districts)

€485

26

Jakarta, Indonesia CBD

€469

27

Tel Aviv, Israel CBD

€457

29

Vancouver, Canada CBD

€442

29

23

Ho Chi Minh City, Vietnam CBD

€441

30

30

Madrid, Spain CBD

€439

34

Seoul, South Korea CBD

€434

32

Helsinki, Finland CBD

€432

n/a

Tbilisi, Georgia CBD

€427

28

Caracas, Venezuela CBD

€427

1 2

5 6 7 8 9 10 11

14 15

18 19

22 23

26 27 28

31 32 33 34

4

€500

€1,000

€1,500

RENT ADDITIONAL COSTS

€2,000

€2,500



MOST EXPENSIVE LOCATIONS BY COUNTRY 2014 2013 RANK RANK

LOCATION

OCCUPANCY COST PER SQ. M. PER YEAR

€0 20

Bogotá, Colombia Nogal

€426

36

Auckland, New Zealand CBD

€406

37

33

Warsaw, Poland CBD

€395

38

35

Brussels, Belgium Quartier Leopold

€393

37

Kyiv, Ukraine CBD

€373

39

Athens, Greece Syntagma Square

€358

44

Copenhagen, Denmark Harbour Area

€345

38

Kuala Lumpur, Malaysia CBD

€343

40

Budapest, Hungary CBD

€343

43

Vienna, Austria Central

€342

42

Bucharest, Romania CBD

€339

46

47

Buenos Aires, Argentina Catalinas

€331

47

41

Prague, Czech Republic CBD

€318

45

Mexico City, Mexico CBD

€306

48

Lisbon, Portugal Av. de Liberdade

€298

50

46

Santiago, Chile Las Condes

€289

51

52

Bangkok, Thailand CBD

€258

50

Bratislava, Slovakia CBD

€257

57

Belgrade, Serbia CBD

€242

54

54

Vilnius, Lithuania CBD

€238

55

49

Manila, Philippines Makati

€235

55

Lima, Peru CBD

€234

51

Manama, Bahrain Financial Harbour

€231

58

60

Riga, Latvia CBD

€227

59

53

Ljubljana, Slovenia CBD

€227

61

Sofia, Bulgaria CBD

€223

n/a

Skopje, FYRO Macedonia CBD

€222

58

Tallinn, Estonia CBD

€221

63

56

Zagreb, Croatia CBD

€207

64

62

Quito, Ecuador CBD

€179

59

Amman, Jordan CBD

€179

n/a

Limassol, Cyprus CBD

€179

63

Sandton, South Africa CBD

€150

35 36

39 40 41 42 43 44 45

48 49

52 53

56 57

60 61 62

65 66 67

€500

€1,000

€1,500

RENT ADDITIONAL COSTS

€2,000

€2,500

5

2014


AMERICAS

NORTH AMERICA HOLDING FIRM In 2013, many office markets in the USA witnessed robust demand as the economy started to improve at a rate stronger than previously expected, although performances were not uniform across the entire country – for example, New York and Boston both experienced double-digit rental growth over the year in certain key submarkets, far outperforming many of the other markets within the country. Boston’s advancement was underpinned by strong activity particularly from the financial and professional services sector, which pushed down vacancy and, subsequently, saw rents accelerate by 16% in 2013. In New York, steady interest from the technology, legal, advertising, media and health care sectors helped to sustain the CBD submarkets. New completions and demand from these active industries helped to push prime rents up by 17% in the Downtown submarket over the year.

MOST EXPENSIVE LOCATIONS: AMERICAS Total Occupancy Cost (USD/sq.ft/year)

150

30

62.5

25

50

20

37.5

15

25

10

12.5


75

5

0

0 Quito New York Bogota CBD Downtown Nogai

Boston Mexico City San Back Bay CBD Francisco NOMA Financial District

RENT

Lima CBD

Seattle Financial District

Brasilia Los Angeles CBD West

RENTAL GROWTH

In Mexico the market was healthy over the year as both supply and demand remained largely consistent, and this steady demand for high-quality space helped to push support a 5% rise in rental rates in Mexico City. Canada as a whole was slightly more subdued than its other North American markets, with rents holding up in the majority of the key cities in 2013.

BRAZIL EASES BACK

120

The Brazilian economy, the principal driver within South America, was weaker than anticipated in 2013, which had a subsequent dampening on both business confidence and occupier demand. Furthermore, cities such as Bogotá and Buenos Aires saw supply outstrip demand over the year, resulting in prime rents easing in 2013.

90 60 30 0 New York Midtown

Rio de Janeiro Zona Sul

Sao Paulo Washington Boston San Francisco New York Faria Lima East End Back Bay NOMA Downtown Financial District

NORTH AMERICA

6

CITIES WITH LARGEST RENTAL GROWTH: AMERICAS

Rent (USD/sq.ft/year)

Although rental performance across the Americas barely changed in 2013, there was a notable polarisation in performances between North and South America. Regional rental growth was fuelled by increases in both the USA and Mexico, where prime rents moved up by 4% and 6%, respectively. Most South American locations, however, saw prime rents decline in 2013, with Colombia, and 2013’s frontrunner – Brazil, experiencing the largest year-over-year declines. Consequently, this divergence between the two regions gave way for New York City (Madison/5th Avenue) to retake the title of the most expensive market in the Americas region, pushing last year’s number one, Rio de Janeiro (Zona Sul), into second place.

Miami Brickell Avenue

SOUTH AMERICA

Brasilia CBD

Los Angeles West

In Rio de Janeiro (Zona Sul) prime rents fell by 7% over the year as occupiers continued to be cautious from the continued economic uncertainty, as well as the impending election in the latter half of 2014. However, the anticipation of the forthcoming World Cup and Olympic games over the next few years has brought a surge of infrastructure developments to the city, many of which are already underway, and it is hoped that these improvements will boost Rio’s attractiveness to international occupiers in the longer term.



THE YEAR AHEAD Looking ahead into 2014, with the foundation for stronger conditions in 2014 set in place, it is anticipated that the USA will continue to propel the region in terms of a buoyant economic growth. This should in turn have a positive effect on occupier demand and consequently help retain the upwards pressure on prime rents. In South America, the burgeoning markets of Colombia, Chile and Peru are anticipated to sustain any growth for the area. However, the outlook for Brazil – one of the key markets for the region is uncertain, with factors such as high inflation and an upcoming election becoming possible obstacles to future growth. As a result, business confidence and occupier demand are both expected to suffer from this and remain subdued, which could see further falls in prime rents over the course of the year.

ASIA PACIFIC

MOST EXPENSIVE LOCATIONS: ASIA PACIFIC 195 Total Occupancy Cost (USD/sq.ft/year)

“Half of the surveyed countries in the Americas region witnessed prime rents rise in 2013.”

162.5 130 97.5 65 32.5 0 Hong Kong Central

Beijing Central

Tokyo New Delhi CBD Connaught (5 Central Place Wards)

Shanghai Lujiazui (Pudong)

NORTH ASIA & INDIA

Sydney CBD

Singapore Mumbai Brisbane CBD Bandra Kurla Centre Complex

Shenzhen Futian

SOUTH ASIA & PACIFIC

HONG KONG KEEPS ITS REGIONAL CROWN Hong Kong was the second most expensive market globally and was also the most expensive location in Asia Pacific, followed by Beijing and Tokyo in second and third for the region, respectively. Occupier demand levels were muted in Hong Kong, with activity from larger occupiers in particular easing noticeably over the year. However, going forward, Hong Kong’s position as one of the most important global financial centres is anticipated to help buoy demand levels into 2014. Prime rents in Hong Kong are expected to remain largely stable with relatively few completions anticipated.

NORTH ASIA & INDIA: SLOWING RENTAL GROWTH In Beijing, prime rents eased marginally over the year, albeit figures starting at a very high base in early 2013. Indeed, the high rents within the CBD have caused many occupiers to rationalise their space as a way to cut down on costs. As China’s GDP growth remains steady, the continued development of the tertiary sector within Beijing has maintained momentum. However, at the current time there are concerns of future oversupply, leading many developers to review their development pipeline carefully. With occupier demand still relatively robust, prime rents are anticipated to be fairly flat in 2014.

Rental performance throughout Asia Pacific in 2013 largely followed the subdued pattern seen in 2012, with prime rents moving up by 2%. Despite easing in the first half of the year, the economic climate across the region improved as the year progressed, with China and Japan expanding. However, these positive performances were not enough to sustain regional growth, and consequently, many occupiers were notably cautious over the majority of the year.

Rental performance across India has been mixed, with the major markets remaining stable whilst others witnessed minor corrections. New Delhi’s CBD (Connaught Place) has remained the most expensive location across the country in 2013 due to its strong rental levels holding firm. With the domestic economy regaining some momentum towards the end of the year, occupier demand moved up significantly in the final quarter of the year, helping to push prime rents upwards in select cities that have low vacancies.

7

2014


The prime office market in Tokyo saw rental declines earlier in 2013; however, levels quickly bounced back to previous figures as the economy saw conditions gradually regain momentum. Business confidence increased over the year, and consequently many occupiers have become less cautious. With demand picking up, prime space in some building is becoming scarce, and therefore a rise in prime rents may occur over the next year.

BURGEONING MARKETS The Metro Manila office market was generally positive throughout 2013, primarily driven by the continued development of the Business Process Outsourcing (BPO) sector. Rents continued to climb due to strong absorption figures, especially in the CBD markets of Makati and Bonifacio Global City, while vacancy remained low despite the growth of office supply. Corporate occupiers continue to expand across major hubs, taking advantage of the talented pool and the lower wages of office workers in emerging cities.

WHAT’S IN STORE A slow performance has become the new norm for Asia Pacific; however, with regional GDP growth still hovering around 5.0-5.5%, Asia Pacific is still ahead of the other regions as seen in 2013. For 2014, a similar trajectory is anticipated, with slow but steady conditions akin to the previous year supporting occupier demand across the region. The key economies of China, Japan and markets in Southeast Asia are anticipated to drive the region forward, with office market demand in particular gaining momentum over the year.

EMEA

CITIES WITH LARGEST RENTAL GROWTH: ASIA PACIFIC 120

Rent (USD/sq.ft/year)

100

20

80

15

60 10

40

5

20 0


25

0 Jakarta CBD

Bangkok Singapore CBD CBD

Manila Makati

Taipei Shenzhen CBD Futian (Xinyi Planned Area)

RENT

Seoul CBD

Shanghai Auckland Lujiazui CBD (Pudong)

Kolkata CBD

RENTAL GROWTH

The most notable rental growth over the year was seen in both Indonesia and Thailand, where prime rents rose by 20% in both Jakarta and Bangkok, respectively. In Indonesia, the improving domestic economy in 2013 translated into sturdy occupier demand and thus expanding take-up levels in Jakarta. In Thailand, limited supply and steady demand characterised the market in Bangkok and subsequently resulted in prime rents increasing over the year. However, the 2014 outlook for Thailand is more volatile due to the ongoing political uncertainty in the country. If political indecision is prolonged, some occupiers will take longer to conclude transactions or may start to look at alternative locations.

8

After five years of financial and economic uncertainty within Europe, the region finally began to see some stability return to the market as 2013 progressed, albeit with notable differences between markets. However, this improvement in economic conditions arrived too late to drive much growth in prime offices rents, with an overall regional uplift of just 3%. Nevertheless, this is the highest regional rise seen since 2008, before the depths of the economic downturn. LONDON LEADS THE WAY... Although the overall regional rental growth was minimal, EMEA still managed to possess the most expensive office market in the world for 2013, as London (West End) retained its title for the second consecutive year. The West End submarket is characterised by strong demand amid a dwindling supply of modern space. Indeed, with leasing activity building momentum over the year, these conditions bolstered a 5% rise in prime office rents in 2013. Rounding out the EMEA ranking, Moscow CBD followed London (West End) in second place, with Paris CBD in third.



CITIES WITH LARGEST RENTAL GROWTH: EMEA

600

40

500 30

400 300

20

200 10

100

...BUT GROWTH SURGES IN MIDDLE EAST & AFRICA The most significant rental expansion within the EMEA region was seen in the Middle East and Africa which witnessed rents increase by 14%. Both Qatar and Dubai saw business confidence pick-up through the year, resulting in increased office market activity as well as supporting prime rental growth of 10% and 5%, respectively. However, it was South Africa that experienced the highest rental growth in the EMEA region in 2013, with prime rents accelerating by almost 30%. The South African market saw a notable increase in the amount of large transactions over the year in the midst of a particularly active occupational market. MOST EXPENSIVE LOCATIONS: EMEA Total Occupancy Cost (EUR/sq.ft.year)

2,500

0


50

700

Rent (EUR/sq.m/Year)

Key European cities such as London and Frankfurt saw prime rents appreciate in 2013, and this helped Western Europe outperform Central and Eastern Europe (CEE) for the first time since 2010. Rents in CEE moved up by just 0.2% in 2013 whereas Western Europe moved ahead by just over 2%. Furthermore, Dublin has rebounded strongly in 2013, and a combination of solid demand against a shortage of prime space has seen rents move up significantly, most notably in the IFS Centre submarket, where an annual rise of 19% was the highest in Europe.

0 Sandton CBD

Durban CBD

Durban Dublin Cape La Lucia Int’l Fin. Town /Berea Svcs. Centre CBD

COST

Riga CBD

Dublin Johannesburg Cape Luxembourg 2/4 Districts CBD Town CBD Bellville

RENTAL GROWTH

GOING FORWARD Looking ahead for the region, the overall lack of high quality space is expected to push many occupiers towards moving sooner rather than later, as they look to secure deals on the limited supply of quality space that is available. With the development pipeline anticipated to continue at low levels until the latter part of 2014, prime rents are likely to remain under pressure. Overall it will still be a mixed picture across Europe on a market-by-market basis in terms of rental performance, but growth across the region is expected to be slow but steady as confidence gradually returns.

2,000

ANNUAL SUB-REGIONAL RENTAL GROWTH

1,500 1,000 500 0 London West End

London City

Moscow CBD

Paris CBD

Luxembourg CBD

WESTERN EUROPE

Oslo CBD

Dubai DIFC

CEE

Geneva CBD

Almaty CBD

Doha CBD

1%

13%

MEA

OCCUPIER TREND: COST CONCERNS

Europe

Middle East & Africa

While demand is strengthening in a number of European markets, occupiers have remained cost conscious over the year, and consequently space rationalisation and consolidations have continued to drive a large component of regional market activity. However, there has been a divergence between prime and secondary space, with occupiers showing an increasing preference for good quality space rather than secondary. As a result, it has primarily been those locations that are experiencing a shortage of prime space that have seen rents rise over the year.

9

2014


COUNTRY SUMMARIES COUNTRY

CITY

MEASURING STANDARD

RENT QUOTED IN

RENT

NET INTERNAL AREA

ANNUAL RENTAL GROWTH (%)

RENT USD/ SQ.FT/YR

RENT EUR/ SQ.M/YR NIA

230.77

AMERICAS Argentina

Buenos Aires, Puetro Madero

NIA

USD/sq.m/mth

26.50

-5

29.54

Argentina

Buenos Aires, Catalinas

NIA

USD/sq.m/mth

30.00

0

33.45

261.25

Brazil

Sao Paulo, Faria Lima

NIA

BRL/sq.m/mth

161.68

-23

76.40

596.79

Brazil

Rio de Janeiro, Zona Sul

NIA

BRL/sq.m/mth

254.36

-7

120.19

938.89

Brazil

Brasilia, CBD

NIA

BRL/sq.m/mth

107.18

3

50.65

395.62

Canada

Toronto, CBD

GIA

CAD/sq.ft/year

25.97

1

27.86

217.66

Canada

Montreal, CBD

GIA

CAD/sq.ft/year

20.21

-4

21.68

169.38

Canada

Calgary, CBD

GIA

CAD/sq.ft/year

33.87

1

36.34

283.87

Canada

Vancouver, CBD

GIA

CAD/sq.ft/year

34.11

-1

36.30

285.88

Canada

Ottawa, CBD

GIA

CAD/sq.ft/year

25.57

-4

27.44

214.31

Colombia

Bogota, Nogal

NIA

USD/sq.m/mth

39.88

16

44.46

347.29

Colombia

Bogota, Andino

NIA

USD/sq.m/mth

39.36

-6

43.88

342.76

Chile

Santiago, Las Condes

NIA

USD/sq.m/mth

28.78

-1

32.08

250.62

Ecuador

Quito, CBD

NIA

USD/sq.m/mth

17.26

23

19.24

150.30

Mexico

Mexico City, CBD

NIA

USD/sq.m/mth

31.18

6

34.76

271.52

Peru

Lima, CBD

NIA

USD/sq.m/mth

22.60

5

25.20

196.81

United States

Atlanta, Midtown

GIA

USD/sq.ft/year

29.39

-4

32.33

252.53

United States

Boston, Back Bay

GIA

USD/sq.ft/year

59.51

16

71.41

557.82

United States

Chicago, West Loop

GIA

USD/sq.ft/year

39.26

-4

49.08

383.34

United States

Houston, CBD

GIA

USD/sq.ft/year

38.49

0

46.19

360.79

United States

Los Angeles, West

GIA

USD/sq.ft/year

49.68

2

57.13

446.27

United States

Miami, Brickell Avenue

GIA

USD/sq.ft/year

43.80

1

65.26

509.78

United States

New York, Downtown

GIA

USD/sq.ft/year

53.79

17

68.31

533.61

United States

New York, Midtown (Madison/5th Avenue)

GIA

USD/sq.ft/year

100.07

-1

127.09

992.72

United States

Philadelphia, West of Broad

GIA

USD/sq.ft/year

27.30

1

31.94

249.50

United States

San Francisco, NOMA Financial District

GIA

USD/sq.ft/year

58.50

5

70.20

548.35

United States

Seattle, Financial District

GIA

USD/sq.ft/year

35.22

4

40.50

316.38

United States

Washington, East End

GIA

USD/sq.ft/year

64.62

1

76.25

595.62

Venezuela

Caracas, CBD

GIA

USD/sqm/month

46.00

0

51.28

400.58

10

RENTAL TREND 2014




CITY

MEASURING STANDARD

RENT QUOTED IN

RENT

NET INTERNAL AREA


RENT USD/ SQ.FT/YR


844.05

RENTAL TREND 2014

ASIA PACIFIC Australia

Sydney , CBD

NIA

AUD/sq.m/year

1,300.00

3

108.05

Australia

Melbourne, CBD

NIA

AUD/sq.m/year

800.00

0

66.49

519.41

Australia

Brisbane, Centre

NIA

AUD/sq.m/year

870.00

1

72.31

564.86

China

Beijing, CBD

NIA

CNY/sq.m/mth

665.00

-3

122.46

956.61

China

Shanghai, Lujiazui (Pudong)

NIA

CNY/sq.m/mth

579.63

5

106.74

833.80

China

Guangzhou, Pearl River New City

NIA

CNY/sq.m/mth

245.23

-10

45.16

352.76

China

Chengdu, CBD

NIA

CNY/sq.m/mth

161.10

-11

29.67

231.74

China

Shenzhen, Futian

NIA

CNY/sq.m/mth

329.00

9

60.59

473.27

Hong Kong

Hong Kong, Central

NIA

HKD/sq.ft/mth

103.39

-1

160.01

1,249.92

India

Mumbai, Bandra Kurla Complex

GEA

INR/sq.ft/mth

285.12

0

82.42

643.81

India

Mumbai, CBD

GEA

INR/sq.ft/mth

275.10

0

62.44

487.78

India

New Delhi, Connaught Place

GEA

INR/sq.ft/mth

414.39

0

114.96

898.03

India

Bengaluru, CBD

GEA

INR/sq.ft/mth

85.47

-3

23.69

185.04

India

Chennai, CBD

GEA

INR/sq.ft/mth

75.50

0

19.53

152.56

India

Hyderabad, Suburban (Madhapur, Gachibowli)

GEA

INR/sq.ft/mth

41.19

2

9.99

78.03

India

Pune, CBD

GEA

INR/sq.ft/mth

80.01

-4

20.70

161.67

India

Kolkata, CBD

GEA

INR/sq.ft/mth

133.27

4

38.52

300.93

Indonesia

Jakarta, CBD

GIA

USD/sq.m/mth

47.26

20

60.06

469.17

Japan

Tokyo, CBD (5 Central Wards)

NIA

JPY/tsubo/mth

40,000.00

0

128.34

1,002.56

South Korea

Seoul, CBD

GIA

KRW/sq.m/mth

32,299.00

6

40.26

314.50

South Korea

Seoul, Gangnam

GIA

KRW/sq.m/mth

26,933.00

-1

33.57

262.25

South Korea

Seoul, Yeouido

GIA

KRW/sq.m/mth

21,149.00

-5

26.36

205.93

Malaysia

Kuala Lumpur, CBD

NIA

MYR/sq.ft/mth

12.00

0

43.96

343.41

New Zealand

Auckland, CBD

NIA

NZD/sq.m/mth

45.00

5

41.29

322.54

Philippines

Manila, Makati

NIA

PHP/sq.m/mth

1,006.00

12

25.27

197.39

Philippines

Manila, Ortigas

NIA

PHP/sq.m/mth

650.00

0

16.33

127.54

Singapore

Singapore, CBD

NIA

SGP/sq.ft/mth

10.82

19

102.84

803.30

Taiwan

Taipei, CBD (Xinyi Planned Area)

GEA

TWD/ping/mth

5,698.00

10

64.47

503.65

Thailand

Bangkok, CBD

GIA

THB/sq.m/mth

900.00

20

32.98

257.60

Vietnam

Ho Chi Minh City, CBD

NIA

USD/sq.m/mth

45.70

-7

50.95

397.97

Vietnam

Hanoi, CBD

NIA

USD/sq.m/mth

37.60

-6

41.92

327.43

11

2014



CITY

MEASURING STANDARD

RENT QUOTED IN

RENT

NET INTERNAL AREA


RENT USD/ SQ.FT/YR


EMEA Austria

Vienna, Central

NIA

EUR/sq.m/mth

25.00

2

38.41

300.00

Austria

Innsbruck, CBD

NIA

EUR/sq.m/mth

11.00

0

16.90

132.00

Belgium

Brussels, Quartier Leopold

GEA

EUR/sq.m/year

275.00

-4

40.49

316.25

Belgium

Antwerp, Centre

GEA

EUR/sq.m/year

145.00

0

21.35

166.75

Bulgaria

Sofia, CBD

GEA

EUR/sq.m/mth

12.50

0

22.08

172.50

Croatia

Zagreb, CBD

NIA

EUR/sq.m/mth

14.50

-6

22.28

174.00

Cyprus

Nicosia, CBD

GEA

EUR/sq.m/mth

14.00

-7

18.28

142.80

Cyprus

Limassol, CBD

GEA

EUR/sq.m/mth

14.00

-13

18.28

142.80

Czech Republic

Prague, CBD

GIA

EUR/sq.m/mth

20.25

-4

33.60

262.44

Czech Republic

Brno, CBD

GIA

EUR/sq.m/mth

12.00

4

19.91

155.52

Denmark

Copenhagen, Harbour Area

GEA

DKK/sq.m/year

1,800.00

0

34.59

270.23

Denmark

Aarhus, CBD

GEA

DKK/sq.m/year

1,200.00

0

23.06

180.15

Estonia

Tallinn, CBD

GIA

EUR/sq.m/mth

13.00

8

22.97

179.40

Finland

Helsinki, CBD

NIA

EUR/sq.m/mth

32.00

0

49.16

384.00

France

Paris, CBD

NIA

EUR/sq.m/year

800.00

-2

102.41

800.00

France

Paris, La Defense

NIA

EUR/sq.m/year

530.00

-4

67.85

530.00

France

Lyon, CBD

NIA

EUR/sq.m/year

260.00

0

33.28

260.00 240.00

France

Marseille, CBD

NIA

EUR/sq.m/year

240.00

0

30.72

FYRO Macedonia

Skopje, CBD

GIA

EUR/sq.m/mth

13.50

0

23.23

181.44

Georgia

Tbilisi, CBD

NIA

USD/sq.m/mth

40.00

0

44.59

348.33

Germany

Berlin, CBD

NIA

EUR/sq.m/mth

22.00

0

33.80

264.00

Germany

Frankfurt, CBD

NIA

EUR/sq.m/mth

37.00

9

56.84

444.00 288.00

Germany

Hamburg, CBD

NIA

EUR/sq.m/mth

24.00

0

36.87

Germany

Munich, CBD

GIA

EUR/sq.m/mth

32.00

2

57.83

451.76

Germany

Dusseldorf, CBD

NIA

EUR/sq.m/mth

27.50

10

42.25

330.00

Greece

Athens, Syntagma Square

GEA

EUR/sq.m/mth

22.00

0

39.88

311.52

Hungary

Budapest, CBD

GIA

EUR/sq.m/mth

21.00

0

35.49

277.20

Ireland

Dublin, 2/4 Districts

NIA

EUR/sq.m/year

355.00

16

45.45

355.00

Ireland

Dublin, Int’l Fin. Svcs. Centre

NIA

EUR/sq.m/year

231.00

19

29.57

231.00

Ireland

Cork, Lapps Quay

NIA

EUR/sq.m/year

200.00

5

25.60

200.00

Italy

Rome, Centre

GEA

EUR/sq.m/year

425.00

-6

58.76

459.00

Italy

Milan, Centre

GEA

EUR/sq.m/year

475.00

-5

65.67

513.00

Kazakhstan

Almaty, CBD

GIA

USD/sq.m/mth

60.00

9

76.92

600.87

Latvia

Riga, CBD

GIA

EUR/sq.m/mth

14.00

17

22.58

176.40

Lithuania

Vilnius, CBD

GIA

EUR/sq.m/mth

14.50

4

24.50

191.40

Luxembourg

Luxembourg City, CBD

GEA

EUR/sq.m/mth

45.00

13

85.72

669.60

Netherlands

Amsterdam, Zuidas

GIA

EUR/sq.m/year

365.00

1

54.97

429.41

Netherlands

Rotterdam, CBD

GIA

EUR/sq.m/year

180.00

0

27.11

211.76

Norway

Oslo, CBD

GEA

NOK/sq.m/year

4,500.00

6

85.45

667.47

Norway

Bergen, CBD

GEA

NOK/sq.m/year

2,250.00

2

42.72

333.74

Poland

Warsaw, CBD

GIA

EUR/sq.m/mth

25.00

-6

41.48

324.00

Poland

Krakow, CBD

GIA

EUR/sq.m/mth

15.00

0

24.89

194.40

12

RENTAL TREND 2014




CITY

MEASURING STANDARD

RENT QUOTED IN

RENT

NET INTERNAL AREA


RENT USD/ SQ.FT/YR


RENTAL TREND 2014

EMEA Poland

Wroclaw, CBD

GIA

EUR/sq.m/mth

15.50

0

25.72

200.88

Portugal

Lisbon, Av de Liberdade

GIA

EUR/sq.m/mth

18.50

0

31.26

244.20

Portugal

Porto, CBD

GIA

EUR/sq.m/mth

13.50

0

22.81

178.20

Romania

Bucharest, CBD

GIA

EUR/sq.m/mth

19.00

0

34.34

268.24

Romania

Timisoara, CBD

GIA

EUR/sq.m/mth

12.00

4

21.69

169.41

Russia

Moscow, CBD

GIA

USD/sq.m/year

1,200.00

0

127.09

992.74

Russia

St.Petersburg, CBD

GIA

USD/sq.m/year

440.00

-8

46.60

364.01

Serbia

Belgrade, CBD

GIA

EUR/sq.m/mth

15.00

0

25.81

201.60

Slovakia

Bratislava, CBD

GIA

EUR/sq.m/mth

15.00

-3

24.89

194.40

Slovenia

Ljubljana, CBD

GIA

EUR/sq.m/mth

11.00

-15

19.94

155.76

Spain

Madrid, CBD

GEA

EUR/sq.m/year

294.00

0

45.16

352.80

Spain

Barcelona, CBD

GEA

EUR/sq.m/year

213.00

-1

32.72

255.60

Sweden

Stockholm, CBD

NIA

SEK/sq.m/year

4,650.00

1

67.26

525.42

Sweden

Gothenburg, CBD

NIA

SEK/sq.m/year

2,450.00

0

35.44

276.84

Switzerland

Zurich, CBD

NIA

CHF/sq.m/year

760.00

0

79.39

620.16

Switzerland

Geneva, CBD

NIA

CHF/sq.m/year

800.00

0

83.56

652.79

Turkey

Istanbul, European side (Levent)

GEA

USD/sq.m/year

528.00

0

60.83

475.12

Turkey

Ankara, CBD

GEA

USD/sq.m/year

276.00

0

31.80

248.36

Ukraine

Kyiv, CBD

GIA

USD/sq.m/year

430.00

0

47.14

368.21

United Kingdom

London, West End

NIA

GBP/sq.ft/year

110.00

5

182.18

1,423.11

United Kingdom

London, City

NIA

GBP/sq.ft/year

57.50

5

95.23

743.90

United Kingdom

Manchester, CBD

NIA

GBP/sq.ft/year

30.00

5

49.69

388.12

United Kingdom

Birmingham, CBD

NIA

GBP/sq.ft/year

27.50

0

45.54

355.78

United Kingdom

Belfast, CBD

NIA

GBP/sq.ft/year

13.00

4

21.53

168.19

United Kingdom

Edinburgh, CBD

NIA

GBP/sq.ft/year

29.00

7

48.03

375.18

United Kingdom

Glasgow, CBD

NIA

GBP/sq.ft/year

28.00

4

46.37

362.25

United Kingdom

St.Peter Port, CBD

NIA

GBP/sq.ft/year

45.00

6

74.53

582.18

Bahrain

Manama, Financial Harbour

NIA

BHD/sq.m/mth

8.00

0

23.66

184.79

Israel

Tel Aviv, CBD

GEA

NIS/sq.m/mth

97.00

1

41.44

323.68

Israel

Tel Aviv (Ramat Hahayal)

GEA

NIS/sq.m/mth

73.00

6

31.18

243.59

Jordan

Amman, CBD

GEA

USD/sq.m/year

170.00

-11

19.58

152.98

Lebanon

Beirut, CBD

GEA

USD/sq.m/year

450.00

0

51.64

403.40

Qatar

Doha, CBD

NIA

QAR/sq.m/mth

230.00

10

70.41

550.04

South Africa

Durban, CBD

NIA

ZAR/sq.m/mth

70.00

40

7.45

58.20 112.25

South Africa

Durban, La Lucia/Berea

NIA

ZAR/sq.m/mth

135.00

35

14.37

South Africa

Cape Town, CBD

NIA

ZAR/sq.m/mth

100.00

18

10.64

83.15

South Africa

Cape Town, Bellville

NIA

ZAR/sq.m/mth

85.00

13

9.05

70.67

South Africa

Johannesburg, CBD

NIA

ZAR/sq.m/mth

75.00

15

7.98

62.36

South Africa

Sandton, CBD

NIA

ZAR/sq.m/mth

180.00

44

19.16

149.66

United Arab Emirates

Abu Dhabi, CBD

NIA

AED/sq.m/year

2,000.00

0

50.59

395.16


Dubai, DIFC

NIA

AED/sq.ft/year

285.00

10

77.59

606.12

13

2014


TECHNICAL SPECIFICATION EXCHANGE RATES COUNTRY

LOCAL CURRENCY

US DOLLAR

EURO

COUNTRY

LOCAL CURRENCY

Australia

Dollar (AUD)

0.8946

0.6493

New Zealand

Dollar (NZD)

US DOLLAR

EURO

0.8230

0.5973

Bahrain

Dinar (BHD)

2.6525

1.9249

Norway

Kroner (NOK)

0.1648

0.1196

Brazil

Real (BRL)

0.4239

0.3076

Philippines

Peso (PHP)

0.0225

0.0164

Canada

Dollar (CAD)

0.9412

0.6830

Singapore

Dollar (SGD)

0.7920

0.5748

China

Renminbi (CNY)

0.1652

0.1199

South Korea

Won (KRW)

0.0009

0.0007

Denmark

Krone (DKK)

0.1847

0.1340

South Africa

Rand (ZAR)

0.0955

0.0693

Eurozone

Euro (EUR)

1.3780

1.0000

Sweden

Krona (SEK)

0.1557

0.1130

Hong Kong

Dollar (HKD)

0.1290

0.0936

Switzerland

Franc (CHF)

1.1244

0.8160

India

Rupee (INR)

0.0162

0.0117

Taiwan

Dollar (TWD)

0.0336

0.0244

Indonesia

Rupiah (IDR)

0.0000822

0.0000595

Thailand

Baht (THB)

0.0304

0.0221

Israel

Shekel (ILS)

0.2881

0.2091


Dirham (AED)

0.2723

0.1976

Japan

Yen (JPY)

0.0095

0.0069

United Kingdom

Pound (GBP)

1.6562

1.2019

Malaysia

Ringgit (MYR)

0.3053

0.2216

United States

Dollar (USD)

1.0000

0.7257

Source: Financial Times, 31st December 2013. All currencies to four decimal places unless stated.

DEFINITIONS

REPORT INFORMATION

For each location a standard definition of a prime unit is employed to endeavor to make the results as comparable as possible given varying local practices. Rents are often quoted on different measurements bases, and for this reason we have standardized the office rents used in this guide by adjusting the rent to a net internal area basis. Some countries quote their rents inclusive, and some exclusive, of service charges and property taxes. With this in mind, in order to make a more detailed comparison across the regions the total occupancy costs were used. CBD office figures relate to new prime centre, high specification units of a standard size commensurate with demand in each location.

This report was written by Barrie David and Erin Can of the European Research Group, London. Further information and copies of this report are available from Erin Can of the European Research Group, London.

The Net Internal Areas figures have been calculated by standardizing the floorspace measurements on which the quoted rent is based. There are various efficiency rates that are relevant to different countries, and we have used a standard for each country (unless stated). Cushman & Wakefield Asia quote all rents on a net usable area and quote effective rents, which takes into account rent-free periods or capital contributions where appropriate, although security deposits are not included. These rents have not been adjusted. Direct Class A rents are quoted in all US locations. Rents have been expressed in USD per square foot per year and EUR per square meter per year, converted using exchange rates as at December of the relevant year. Rental growth figures are quoted in local currency unless otherwise indicated. Total occupancy costs take into account service charges and local taxes to allow direct comparison between countries. 14

Telephone: +44 207 152 5206 Email: [email protected] Gain access to all of Cushman &Wakefield’s research and publications globally by visiting our website. Covering global, regional and local markets, our Research & Insight page combines real business insight with emerging trends and market data. Visit now to download business briefings and special reports, and open the doors to powerful insights aimed at improving your productivity, profitability and competitive position. For industry-lead intelligence to support your real estate and business decisions, go to Cushman & Wakefield’s Research and Insight at www.cushmanwakefield.com/research



CONTACTS GLOBAL OFFICE CONTACTS

THE AMERICAS

ASIA PACIFIC

EMEA

James M. Underhill CEO The Americas Tel: +1 202 471 3600 Email: [email protected]

Richard Middleton Executive Managing Director Corporate Occupier & Investor Services Asia Pacific Tel: +85 2 2956 7075 Email: [email protected]

James Young Head of EMEA Offices Tel: +44 207 152 5113 Email: [email protected]

THE AMERICAS

ASIA PACIFIC

EMEA

Maria T. Sicola Executive Managing Director Americas Research Tel: +1 415 773 3542 Email: [email protected]

Sigrid Zialcita Managing Director Asia Pacific Research Tel: +65 6232 0875 Email: [email protected]

Barrie David Senior Research Consultant EMEA Research Tel: +44 207 152 5937 Email: [email protected]

GLOBAL RESEARCH CONTACTS

ALLIANCE & ASSISTANCE This report has been prepared by Cushman & Wakefield and its alliance partners globally. The information was collected and analysed by the European Research Group from the Cushman & Wakefield network, with particular thanks to the following offices: AUSTRIA

Inter-pool Immobilien GmbH

BAHRAIN

Cluttons LLP

BULGARIA

Forton

CHANNEL ISLANDS DENMARK

Buckley & Company Ltd. RED – Property Advisers

ESTONIA

Ober-Haus Real Estate Advisers

FINLAND

Tuloskiinteistot Oy

FYRO MACEDONIA GEORGIA

Forton Veritas Brown

GREECE IRELAND ISRAEL JORDAN KAZAKHSTAN LATVIA LEBANON LITHUANIA MALAYSIA

Proprius SA Lisney LLP Inter Israel Real Estate Consultants

NEW ZEALAND NORWAY

Bayleys Realty Group Ltd. Eiendomshuset Malling & Co.

QATAR

Cluttons LLP

Michael Dunn & Co S.A.L

ROMANIA

Activ Property Services

Veritas Brown

SLOVENIA

S-Invest d.o.o.

Ober-Haus Real Estate Advisers

SOUTH AFRICA

Michael Dunn & Co S.A.L

SWITZERLAND

Ober-Haus Real Estate Advisers YY Property Solutions

THAILAND

ProAfrica Property Services SPG Intercity Nexus Property Consultants Ltd.

UNITED ARAB EMIRATES

Cluttons LLP

15

Cushman & Wakefield (C&W) is known the world-over as an industry knowledge leader. Through the delivery of timely, accurate, high-quality research reports on the leading trends, markets around the world and business issues of the day, we aim to assist our clients in making property decisions that meet their objectives and enhance their competitive position. In addition to producing regular reports such as global rankings and local quarterly updates available on a regular basis, C&W also provides customized studies to meet specific information needs of owners, occupiers and investors. Cushman & Wakefield is the world’s largest privately-held commercial real estate services firm. The company advises and represents clients on all aspects of property occupancy and investment, and has established a position in the world’s major markets, as evidenced by its frequent involvement in many of the most significant property leases, sales and management assignments. Founded in 1917, it has approximately 250 offices in 60 countries, employing more than 16,000 professionals. It offers a complete range of services for all property types, including leasing, sales and acquisitions, equity, debt and structured finance, corporate finance and investment banking, corporate services, property management, facilities management, project management, consulting and appraisal. The firm has nearly $4 billion in assets under management globally. A recognized leader in local and global real estate research, the firm publishes its market information and studies online at www.cushmanwakefield.com/knowledge This report has been prepared solely for information purposes. It does not purport to be a complete description of the markets or developments contained in this material. The information on which this report is based has been obtained from sources we believe to be reliable, but we have not independently verified such information and we do not guarantee that the information is accurate or complete.

16

Published by Corporate Communications. ©2014 Cushman & Wakefield. All rights reserved. Cushman & Wakefield, LLP 43-45 Portman Square London W1A 3BG

www.cushmanandwakefield.com

www.cushmanwakefield.com