Global Occupier Dashboard
Global office markets favour occupiers, as the brakes start to come off 67% of global markets covered in our latest Global Occupier Dashboard are viewed as tenant favourable in 2021
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Our Q4 2020 edition of the Global Occupier Dashboard covers prime rents and total occupancy costs (normalised to US$ per sq ft) as well as prevailing market conditions over the next 2 years in 86 global real estate markets, including 19 markets in the MEA region.
As a challenging year ended with limited occupier activity in either in the form of deals or active demand, our dashboard shows that markets are in the main balanced or tenant favourable. Although not true of all markets, given variances in lock-down measures and infection rates, there are signs of a thaw occurring in many markets since the turn of the year, with viewings up, active requirements (re)emerging and occupiers starting to conduct market and workplace studies as they seek to respond to lessons from the great global workplace experiment of the last 12 months.
Within markets we expect an increasing polarisation in the rents being achieved by best in class buildings and the rest. As our forthcoming (Y)OUR SPACE report will illustrate, best in class offices will be strategic, safe, sustainable and smart.
Key points from the dashboard:
- More global markets have turned tenant favourable for 2021. 67% of the markets covered in the report are expected to show tenant favourable market conditions for 2021, which is an increase from the 44% of markets in our Q3 report.
- Aligned to this finding, only 7% of the global markets we cover are expected to show landlord favourable conditions in 2021 – those markets being Amsterdam, Brussels, Bengaluru, Cairo, Seoul and Taipei. There are no markets in the Americas showing landlord favourable conditions in either 2021 or 2022 (although history suggests that these perceptions, across all markets, can change quickly going forwards).
- Across our 86 markets average prime rent stood at US$45.07 per sq ft and total occupancy costs (rents, taxes and service charges) stood at US$57.87 per sq ft. Both rental figures increased q-on-q although this is a reflection of currency fluctuations over the period. Market observations suggest that in most markets asking rents are being held stable but deals are being underpinned by more generous tenant incentives such as rent free periods.
- There is huge disparity in rental costs shown through the research – with the current most expensive office market being Hong Kong at US$179.99 per sq ft and the least expensive being Harare, Zimbabwe at US$7.81 per sq ft.