Beijing wins an impressive five out of six possible 'gold medals' and tops the table for performance among the leading 100 global city office markets, according to a new research report released today by Cushman & Wakefield.
The report looks at how global office markets have been performing and awards medals for the fastest growth, the strongest rental or yield recovery since the last global downturn and for which can sustain the highest rents and capital values. Highlights include:
- San Francisco ranks second behind Beijing with rental values buoyed by strong demand from its tech-driven economy. By contrast Moscow lies in third place, with commodity strength aiding its recovery.
- London takes fourth place on a par with Shanghai on the back of a strong upturn in rents and capital values as well as the focus of being host Olympic city.
- Asia was the top performing region overall, winning more medals and more golds than the Americas in second place and EMEA in third.
- Overall Europe lags behind due to a slower recovery compared to other global regions as the sovereign debt crisis weighs on business decision making.
According to Glenn Rufrano, Global President & CEO Cushman & Wakefield, "Major international sporting events are an opportunity for the host city to show off on the global stage and London has done just that with its office market claiming a podium finish in our analysis.
However what's interesting about this research is the truly global nature of the winners' table with mature markets like San Francisco and Hong Kong in the mix but Beijing on top and other emerging markets such as Moscow, New Delhi and Sao Paulo right up there - and it's not as simple as saying the so-called emerging markets are seeing the growth and the "mature" markets have the highest values. We are seeing a real mixing of demand and activity which means we have a truly global market in which these old labels are being left behind."
The Americas was the leading region for 'fastest' value growth in the past year based on rent and yield adjustments. North America was ahead for yield compression, with US and Canadian cities taking six out of the top 10 spots. Latin America out-performed on rental growth however, with Sao Paulo, Bogota and Lima in the top 10 for rental growth alone.
Jim Underhill, CEO America's Cushman & Wakefield said; "The Americas enjoy their leading gold medal status driven by 'faster' performance in rent and yield growth over the last year. The US and Canada lead with respect to yield compression while Latin America prevails in the rent growth category. New York tops the leader board for high capital values driven by global investment and occupier demand but San Francisco shines as the current star performer thanks to demand from technology firms which has fuelled strong rental growth."
Asia came out top for the highest rents and capital values sustained, with five out of the top 10 global markets. London and New York secured places high up on list whilst Paris, Zurich and Geneva round out the top 10. Despite Beijing taking the overall top spot for performance, it was beaten by Tokyo and Hong Kong as the most expensive by rent and by Taipei and Hong Kong as the most expensive by yield.
Asia again stands out as the stronger market when it comes to the recovery seen since the end of the great recession, with aggregate office rental values up over 15% since 2009, led by mainland China followed by Hong Kong, Indonesia and Singapore.
Sanjay Verma, CEO Asia, Cushman & Wakefield, said; Asia's 'stronger' performance attests to the region's resilient economic landscape that spurred broad-based improvements in the office sector last year which have continued into 2012. The growing clout of the region's growth markets can be seen in the above-average performance of a number of major markets led by Beijing, Shanghai and New Delhi.
Of course, the region has not been immune to the recent worsening in the economic environment, with a few strongholds such as Hong Kong losing steam this year,