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News Release


Global Office Index Shows Prime Office Rents Increase for Seventh Consecutive Quarter 

Jones Lang LaSalle’s new index shows vacancy rate drops to two-year low 

​London, 7th November 2011 - Despite corporations delaying real estate decisions and facing renewed pressure to drive down costs in the face of economic volatility in Europe and the United States prime office rents across 81 global markets increased by a further 1.1 percent during third quarter 2011, according to the inaugural Jones Lang LaSalle Global Office Index.

The firm’s new Index shows this was the seventh consecutive quarter where prime rents have risen which reflects an 8.2 percent uplift since the bottom of the market in fourth quarter 2009 and a 5.5 percent increase year-on-year.

“Most major markets are in better shape than they have been since 2008, but investors and corporations are unsettled by current economic uncertainties.  Appetite for risk has diminished as investors take refuge in core well-let product and sentiment is starting to impact corporate decision making,” said Arthur de Haast, Head of the International Capital Group at Jones Lang LaSalle.

Jeremy Kelly, Director in Jones Lang LaSalle’s Global Research team and author of the firm’s Global Market Perspective which has just been released, added, “Despite the headwinds, global commercial real estate investment volumes, tenant absorption rates, prime rents and capital values are, so far, holding firm and most markets continue to make steady progress through this period of heightened volatility.”

Key findings of the Jones Lang LaSalle’s Global Office Index include:

• Asia Pacific office markets had the highest rental growth of 2.5 percent quarter-on-quarter.  The Americas followed with an increase of 1.1 percent in Q3.  However, economic concerns in Europe have weighed down on markets and growth has come to a virtual halt, from 2.1 percent in Q2 to 0 percent in Q3.

• Real estate markets are diverging, with emerging markets in the BRIC economies demonstrating strong year-on-year performance, with increases in Beijing (+50.6 percent), Moscow (+41.2 percent), Shanghai (+23.7 percent) and Sao Paulo (+20.4 percent).  Other Asia Pacific markets also registered positive growth, including Jakarta (+48 percent), Hong Kong (+20.6 percent) and Manila (+20.9 percent).
• The ongoing strength of the global technology sector meant that Silicon Valley (+60 percent), Bangalore (+19.7 percent) and San Francisco (+17.1 percent) also had positive rental performance.  Equally, demand from the commodities sector supported strong year-on-year growth in Perth (+26.9 percent).

• The largest quarterly falls in rents were experienced in Mexico City, Brussels, Dublin, Vancouver and Canberra, who all experienced drops between 2 and 4 percent.

“We continue to expect positive rental growth in major prime office markets during 2012.  Most major markets are expected to see at least single-digit growth, with some markets such as Beijing, Tokyo, San Francisco and Toronto having the potential to outperform in 2012.  Hong Kong and Singapore, however, may see rents soften over the next few months,” commented Kelly.

He added: “Despite signs of a deceleration in office leasing activity across the major international business hubs, the average global office vacancy rate of 13.8 percent is now the lowest in two years. The prime leasing markets in advanced economies are fairly tight and the supply pipeline remains very low. In this context, we believe that markets are well placed to resume their growth pattern once a degree of confidence resumes.”

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Notes to editors:

• Jones Lang LaSalle’s Global Office Index tracks the rental performance of prime office space across 81 major markets in the Americas, Asia Pacific and Europe Charts available on request. The Jones Lang LaSalle Global Market Perspective is a regular view on the impact of economic forces on property markets worldwide. It is a unique combination of updates from professionals on the ground and the insights of our leading research organization. The latest full report is available to view on:
• The firm’s current research material on global capital markets can also be found on an interactive website. Bookmark this site for the latest data and views on global capital markets:
• Charts available on request.