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ASIA PACIFIC LEADS RENTAL GROWTH AS EMEA AND AMERICAS FADE

Global Office Rent Cycle MarketView | Q2 2016

Executive Summary

  • The global economy endured a weaker-than-expected first half of 2016, due mainly to volatility in China and Asia at the beginning of the year, and to a period of substantially slower U.S. growth. Oxford Economics expects improvement in the second half, leading to annual growth of 2.2% in 2016.
  • The Global Office Rental Index was essentially flat in Q2 2016, registering quarter-over-quarter growth of 0.1%—a decline from the previous quarter’s 0.6%. Growth remained stable in Asia Pacific but slowed in EMEA and the Americas.
  • In line with expectations for an H2 2016 acceleration in growth, U.S. gross asking rents registered year-over-year growth of 6.2% in Q2 2016—the fastest rate of the current cycle. In Canada, average national office rental rates fell as new supply and rising vacancy prompted landlords to offer more inducements to tenants.
  • In EMEA, rents stalled in Q2 2016, marking no change from the first quarter of the year. The static development pipeline, solid regional demand momentum and consequent likelihood of further vacancy declines mean rental growth should pick up in the coming quarters.
  • In Asia Pacific, rental growth edged up by 0.5%, quarter-over-quarter, despite an ongoing moderation in demand. Leasing momentum has been slow this year—and corporates more cautious—due to economic uncertainty.

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Global Office Rent Cycle, Q2 2016


Global Office Rent Cycle Q1 2016







Global Office Rent Cycle MarketView

For more information please contact:

Nick Axford, Ph.D.
Head of Research, Global
+44 20718 22876
Richard Barkham, Ph.D.
Chief Economist, Global
+617 912 5215
Neil Blake, Ph.D.
Global Head, Forecasting and Analytics
+44 20 7182 2133
Henry Chin, Ph.D.
Head of Research, Asia Pacific
Asia Pacific
Research
+852 2820 8160
+852 2810 0830
Spencer Levy
Head of Research, Americas | Senior Economic Advisor
+1 617 9125236
Dennis Schoenmaker, Ph.D.
Global Economist
+44 2071822457