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Outlook for Office Markets Abroad Unclear

BOSTON-Colliers International, based here, indicates that despite steady declines in office vacancies and increases in office rental rates, a number of economic problems have surfaced that could lead to a sluggish performance this year.

By John Jordan | Updated on March 26, 2001

BOSTON-Office markets throughout the world have been riding high with strong demand for office space, lower vacancy rates and rising rents. However, the outlook for major markets in Europe, Asia and Latin America, is uncertain for the remainder of this year, because of the turbulent financial markets and other economic factors, according to Colliers International.

Some of the economic concerns the commercial brokerage firm cited as potential problems for the office market include: a struggling US economy as well as rising energy costs, particularly for Europe and most of Asia. Colliers officials noted, however, that the Organization for Economic Cooperation and Development considers the prospects for the world economy to remain relatively bright and anticipates the global economy to grow by 3.3% in 2001. This compares with 4.3% growth in 2000, which was the fastest rate of growth for the world economy in more than a decade.

Colliers officials say that most European office markets are experiencing rising demand. Fueled by improving labor markets, most of Europe’s major office markets continue to experience increased demand. Reflected by a 20-year low unemployment rate of 9.0%, job growth in most of Europe has significantly increased the demand for office space.

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