HONG KONG-Office growth in Asia set the curve high for the rest of the world in the second quarter, with a 13.4% increase in rents over Q2 2010, according to the latest CB Richard Ellis Global Office Rent Index. Average office growth increased 7.4%, though Asia’s showing skewed the number somewhat in comparison to small growth reports for EMEA and the Americas.
According to the report, office rents grew 2.4% year-over-year in Europe, the Middle East and Africa, and only 1.5% for the same time in the Americas. The slowing US economic recovery was provided as one explanation, as well as the debt problems in Europe.
Ray Torto, CBRE’s global chief economist, tells GlobeSt.com that the markets here, in Singapore and Seoul have been particularly strong, though Tokyo has shown weakness due to the earthquake aftermath. Traditionally, however, data from the report shows that Asia has had wilder swings both much higher and lower with rent growth since 2002, including in mid-2009 when Asian rents dropped about 25%, compared to the rest of the world seeing a 15% drop.
Torto says though the US did not see much rent growth, the second quarter was the first in positive numbers for the region in a while. Unfortunately, current uncertainty, such as the more than continued days of massive stock price drops, will likely have an impact on global growth for the rest of the year. “I think it will have some effect on rents,” Torto says. “I was talking with people in Asia Wednesday night, they were having a little bit of a pause (this interview was before our Dow Jones dropped more than 400 points Thursday). If this keeps up, it will lead to a delay in growth, but probably won’t be a full stoppage.”
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