Research
Global Real Estate Markets Annual Review and Outlook 2012
2012 GLOBAL REAL ESTATE MARKETS Annual review and outlook
Highlights • International commercial property markets have reacted to the increased uncertainty in the global economy in late 2011 and early 2012 with varying degrees of resilience. Demand for office space has remained robust in many markets in the US, Germany and mainland China, but reduced occupier confidence and falling rents have been witnessed in a number of major Asian financial centres and in the European markets most affected by the debt crisis. • Strong recent leasing activity in Central and Eastern Europe, Germany and the Nordic region has contrasted with the weaker performance of markets in other European countries that have been more severely impacted by sovereign debt concerns. The pace of prime office rental growth has slowed significantly across most of Europe, and rental increases are expected to be relatively subdued in 2012. • The momentum of the recovery in the US commercial property sector has been maintained, supported by an improving labour market. Class A office rents have been rising in most US markets, with the strongest growth being recorded in Manhattan and San Francisco, where occupier demand has been driven by the thriving technology sector. • Asian office markets have experienced contrasting recent fortunes. Strong demand for space and low vacancy rates have pushed prime office rents sharply upwards in the major markets of mainland China, especially Beijing, and rental growth is expected to continue during 2012. In contrast, prime rents have started to come under downward pressure in Hong Kong and Singapore. • The markets of the Middle East have been affected by both the recent political turbulence in the region and high levels of development activity, which have left many locations with substantial volumes of vacant office space. Occupier market activity in Dubai has, however, benefited from its perceived status as a “safe haven” within the region. • Africa’s emerging property markets have continued to develop, supported by strong economic growth and increased foreign direct investment, particularly from China. However, high quality office space remains in short supply in many cities. • Globally, commercial property investment volumes rose moderately in 2011 compared with 2010. It is anticipated that annual transaction volumes in 2012 will be similar to 2011, albeit the second half of the year is expected to be stronger than the first half. Investor caution, continued constraints on debt financing and a lack of large-scale transactions have led to reduced investment volumes in early 2012 in a number of international markets. However, activity should improve if wider economic conditions stabilise over the course of the year, particularly in the Eurozone.
2
www.knightfrank.com
Contents Europe
4
North America
12
Middle East
20
Africa
24
Asia-Pacific
28
Global office rents
33
3
2012 GLOBAL REAL ESTATE MARKETS Annual review and outlook
Europe
The debt crisis in the Eurozone escalated over the course of 2011, putting increased strains on the European economy. For 2011 as a whole, Eurozone GDP rose by 1.4%, but growth was concentrated towards the start of the year, and a quarterly contraction of -0.3% was observed in Q4. With fiscal austerity measures dragging on growth, it appears likely that the Eurozone re-entered recession in Q1 2012. Negative growth is most likely during 2012 in the countries that are under the greatest pressure to reduce their deficits, notably Greece, Portugal, Ireland, Italy and Spain. 4
Figure 1
European office vacancy rates % 25 20 15 10 5
Q2 2010
Q4 2010
Q2 2011
Warsaw
Prague
Paris
Munich
Moscow
Milan
Madrid
London
Lisbon
Frankfurt
Dublin
Brussels
Amsterdam
0
Q4 2011
Source: Knight Frank Research
Despite the gathering economic gloom, a
subdued in the more peripheral markets
rents were recorded in a number of European
number of European occupier and investment
affected by sovereign debt concerns.
office markets in 2011, but the pace of rental
markets performed remarkably well in 2011. Several Central and Eastern European (CEE) cities, for example, had record-breaking years for office take-up. However, property market
Knight Frank’s European office take-up index, which provides a cumulative measure of office market activity across 15 major cities,
growth generally slowed in the second half of the year, as economic concerns led to increased occupier caution.
recorded a moderate increase in overall
Overall European commercial property
European leasing volumes in 2011 compared
investment volumes amounted to â‚Ź113.7
mirrored the economic strength of individual
with 2010. Decreased activity in central
billion in 2011, according to Real Capital
countries. Increased leasing and investment
London, Madrid and Brussels was
Analytics/Knight Frank data. This was an
activity was recorded in most German, Nordic
counterbalanced by improved take-up in the
increase of 11% on 2010, with the
and CEE cities in 2011, but activity was
CEE region and Munich. Increases in prime
improvement in activity largely driven by
performance varied greatly, and broadly
Record office take-up was witnessed in several Central and Eastern European markets in 2011
London
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2012 GLOBAL REAL ESTATE MARKETS Annual review and outlook
Following the hardening of prime office yields in most European markets in 2010, there was more limited evidence of yield compression in 2011. Over the course of the year, modest inward yield movements were recorded in cities including Paris, Munich, Warsaw and Prague. Prime office yields were unchanged in London and Amsterdam throughout 2011, while, towards the end of the year, yields came under outward pressure in a number of markets in Europe’s weaker economies, particularly Lisbon and Dublin. Office take-up in central London in 2011 was recorded at 10.7 million sq ft, which was 27% down on the previous year. The second half of 2011 was notably stronger than the first half, but the whole year was marked by a lack of large leasing transactions, with only 16 deals in excess of 50,000 sq ft recorded, half the
Paris
number of 2010. There was a significant slowing in the rate of prime rental growth; after rising by 31% in 2010, West End prime
increased volumes in Germany and the
interest in London and Paris reflected the
CEE region.
continued flight to prime property, as demand focused on low-risk core assets in large,
London and Paris remained, by some
then remained unchanged in H2. In the City market, prime office rents were stable
liquid markets. Central London offices, in
distance, the cities with the largest
office rents increased by 9% in H1 2011 but
throughout 2011.
investment markets in Europe, with
particular, saw an influx of cross-border
commercial transaction volumes of €19.2
capital, particularly from Asia, with major
billion and €11.9 billion, respectively; the
transactions involving buyers from countries
Paris total was more than three times that of
including Malaysia, Singapore, Hong Kong,
the next most active city, Moscow. Investor
South Africa and the US.
There was a continued polarisation in the performance of UK retail markets during 2011. The central London market remained resilient, with demand for prime space exceeding supply. Extremely high rents have continued to be recorded on London’s most expensive
Figure 2
thoroughfare, New Bond Street, as luxury
European office take-up
retailers compete for limited space. In
sq m
contrast, many town centres in the UK now
1,500,000
have exceptionally high vacancy rates. Occupier demand in the UK industrial
1,200,000
property sector softened in 2011, although new requirements have continued to emerge, particularly from retailers seeking to realign
900,000
supply chains or expand their e-fulfilment businesses. Speculative development
600,000
remains limited and restricted to a small number of locations with good rental growth
300,000
Source: Knight Frank Research
6
Warsaw
Prague
Munich
Paris (Central & La Défense)
2010 2011
Moscow
Milan
Madrid
London (Central)
Lisbon
Frankfurt
Dublin
Brussels
have been acquiring sites in anticipation of Amsterdam
0
prospects. However, a number of developers increasing pre-letting activity. Take-up in the Paris (Île de France) office market amounted to just over 2.4 million sq m in 2011, 13% up on 2010, with the improvement primarily driven by a number of
very large leasing transactions of over
Figure 3
20,000 sq m. There was, however, a slowdown
European prime office rents – annual change, Q4 2010 to Q4 2011
in the number of deals recorded between
%
5,000-20,000 sq m, partly due to the
Stockholm Paris Oslo Moscow London (West End) Warsaw Helsinki Frankfurt Manchester Milan Berlin Copenhagen Munich Vienna Prague London (City) Budapest Bucharest Brussels Birmingham Amsterdam Madrid Lisbon Barcelona Dublin
diminishing availability of prime space in this size range. While the overall Île de France vacancy rate remained at 7.0% at the end of 2011, unchanged from the start of the year, availability in the Paris CBD fell from 5.7% to 4.6%. This supported a gradual increase in prime rents over the course of 2011, which rose by 11% to reach €830 per sq m per annum. Demand for retail space in France has been increasingly concentrated on prime locations, with brands competing for space in the best shopping centres and high streets. With consumer spending slowing, retailers have begun to rationalise their portfolios and close stores in weaker locations. Prime retail rents
-15
-10
-5
0
5
10
15
Changes calculated in local currency terms Source: Knight Frank Research
have come under modest downward pressure, while more marked decreases have been seen in secondary areas. Demand for space in the major German office markets proved to be resilient during 2011, with increased take-up recorded in cities including Munich and Berlin. Take-up was
ending the year at €27 per sq m per month,
The Lisbon office market endured a tough
a modest fall of 4% compared with 2010, but
Stockholm 2011, with take-up of approximately Paris
Oslo 80,000 sq m, 25% down on 2010 and the Moscow
36% down on the level reached in 2007-08.
London (West End) lowest annual total recorded in more than Warsaw
In the Spanish investment market, the sale of
Helsinki 15 years. The overall vacancy rate has risen Frankfurt
the Torre Picasso building to Pontegadea
steadilyManchester over the last three years to reach over Milan
Inmobiliaria, the property firm owned by
Berlinavailability is above 20% in the 12%, while
Spain’s richest man Amancio Ortega, at the
Parque Munich das Nações and Western Corridor
prime rents up by 6% to €432 per sq m per
end of 2011, proved that there remains
Prague A very limited development submarkets.
annum. With development completions at a
interest in prime Madrid property, particularly
pipelineBudapest should help to constrain further
limited level, vacancy rates have fallen across
from local cash-rich buyers. However, the
growth Brussels in vacancy rates, but prime rents,
the largest German markets.
extent to which property values have fallen in
Amsterdam which fell by 6% in 2011, may continue to
Spain in recent years was illustrated by
come under Madriddownward pressure.
reports suggesting that the sale price of €400
There were positive signs in the Dublin office
moderately down in Frankfurt, but demand for the best space was strong enough to push
Confidence in Germany’s relative economic strength was reflected in robust investment
-15 -12
-9
-6
-3
0
3
market activity. Commercial investment
million was less than half the building’s value
volumes amounted to €22.7 billion, a rise of
at the market peak in 2007.
Copenhagen Vienna
London (City) Bucharest
Birmingham Lisbon
Barcelona Dublin
6
9
12
15
market in 2011, with take-up improving on the previous year. The overall vacancy rate
45% on 2010. Retail property attracted an increased share of activity, boosted by several major shopping centre deals such as the acquisition of the PEP mall in Munich by US institutional investor TIAA-CREF for c.€408 million. In contrast to Germany, market conditions deteriorated in 2011 in many countries entangled in the Eurozone debt crisis. Sentiment in Spanish property markets was weak, which was reflected in reduced office leasing activity in Madrid. At 292,000 sq m, take-up was nearly 20% down on 2010 and 45% below the ten-year average. Prime office rents have continued to drift downwards,
Madrid
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2012 GLOBAL REAL ESTATE MARKETS Annual review and outlook
Figure 4
Despite the negative news surrounding the
European office take-up and vacancy rate indices
Italian economy, there were robust levels of
H1 2005=100
leasing activity in Milan in 2011. Nonetheless,
160
availability has increased, particularly in
140
peripheral areas, as occupier interest has been focused on prime central space at the
120
expense of lower quality offices in secondary
100
locations.
80
Recent office market activity in Vienna has
60
largely been driven by tenants relocating to more cost-effective premises. The city’s
40
vacancy rate has risen to 6.3%, but this remains
20 0
low compared with most other European H1 H2 2005
H1 H2 2006
H1 H2 2007
H1 H2 2008
Office take-up index
H1 H2 2009
H1
H2 2010
H1
2011
H2
Office vacancy rate index
Indices are based on 15 key European markets, weighted by size and market maturity Source: Knight Frank Research
remains high at over 20%, but there are very
The uncertain climate also led to a 25 basis
few large spaces available in the city centre
points softening of prime office yields, to
and no significant office developments are
6.25% in the final quarter of 2011.
currently under construction.
The Amsterdam market remained relatively
In Belgium, occupier and investor sentiment
robust in 2011, with office take-up rising by
weakened in 2011, influenced by concerns
7%, to 258,000 sq m. The strength of
over both the wider Eurozone debt crisis and
demand, together with decisions to change
the country’s own troubled public finances
the use of some unmarketable office
and political instability. Office take-up in the
buildings, contributed to a slight decrease in
capitals. Prime rents were stable at €24.50 per sq m per month throughout the year. Occupier and investor confidence in the Nordic region was relatively high in 2011. The Nordic countries have been comparatively unaffected by the debt crisis, having low levels of public debt and, with the exception of Finland, being outside the Eurozone. Stockholm and Oslo recorded some of the strongest prime office rental growth anywhere in Europe in 2011. Commercial property investment in Sweden amounted to €7.1 billion, up by 20% on 2010, making it the fourth most active country in Europe, behind the “big three” markets of the UK, Germany and France.
Brussels market was 324,000 sq m, which
Amsterdam’s structurally high vacancy rate,
The CEE region also performed strongly in
was the lowest for nearly 20 years. There were
taking it from 17.5% to 17.0% over the course
2011, being home to some of Europe’s fastest
a number of large leasing transactions
of the year. In contrast, other Dutch markets
growing economies and largely immune from
involving public sector occupiers, but
including Rotterdam and The Hague saw
the worst effects of the Eurozone debt crisis.
corporate tenants remained cautious, putting
reduced take-up and continued rises in
Poland, in particular, continued to see
expansion and relocation decisions on hold.
availability in 2011.
buoyant economic growth, with GDP rising by 4.3%. This translated into strong demand in the Warsaw office market, which saw take-up reach a record 573,000 sq m. Prime office rents moved upwards by 8% during 2011, to end the year at €25.60 per sq m per month. The Prague office market also witnessed record take-up, of 276,000 sq m, in 2011. While tenant renegotiations have continued to be an important driver of the market, corporate expansion accounted for an increased proportion of activity. The city’s vacancy rate fell to 12.0% at the end of 2011, from 13.2% a year earlier, but this was not enough to put serious upward pressure on
Frankfurt
8
prime rents, which remained unchanged at €20-21 per sq m per month.
Bucharest was another CEE office market to have its strongest year on record, with annual take-up of 240,000 sq m in 2011. Only 115,000 sq m of new office space was brought to the market, 70% down on the previous year, and there are very few large-scale projects currently in the development pipeline. Vacancy rates have fallen, currently standing at 10% in the CBD, and below 1% in the Calea Floreasca/Barbu Vacarescu area, which has become an increasing focus of occupier demand in recent years. The CEE area saw some of the sharpest rises in investment activity seen anywhere in the world in 2011, as commercial property sales came to approximately €8.2 billion, well over double the 2010 figure. Over 80% of investment volumes came from cross-border sources, with institutional investors from Germany, Austria and the US among the most active buyers.
% 10 8 6 4 2
Q4 2010
Warsaw
Stockholm
Prague
Paris
Munich
Moscow
Milan
Madrid
London (West End)
London (City)
Lisbon
0 Frankfurt
The weakening of economic conditions around the turn of the year has added to the already uncertain outlook for European occupier markets in 2012, and it is possible that activity may yet be impacted by further developments in the Eurozone. Generally,
European prime office yields
Dublin
activity, and the availability of large, modern offices has attracted international and Russian occupiers to the area.
Figure 5
Brussels
St Petersburg also recorded rising office rents and falling vacancy rates. The most significant recent development in the market has been the growth of the Pulkovo business district, south of the city and near the airport. This location has become a significant focus of construction
Moscow
Amsterdam
Further east, Russian commercial property markets have recovered well over the last two years, after occupier demand collapsed in 2009. Take-up of Class A and B office space in Moscow was 989,000 sq m in 2011, almost exactly the same level as 2010, but still some way short of the totals recorded in the boom years of 2006-08. Since peaking at 19.5% in 2009, the Class A vacancy rate has steadily fallen, ending 2011 at 12.5%. Average Class A rents rose by 9% in 2011, and further increases are expected in 2012. Rental growth is anticipated to be strongest in the city centre, as a result of falling supply levels and new government restrictions on construction activity.
Q4 2011
Source: Knight Frank Research
9
2012 GLOBAL REAL ESTATE MARKETS Annual review and outlook
Figure 7
Top ten European commercial investment markets, 2011 € billion London Paris Moscow Frankfurt Stockholm Hamburg Manchester Munich Berlin Warsaw
0 Prague
The prospects for office rental growth have weakened, although the continued scarcity of prime space in many city centres may lead to some modest rental increases in 2012, especially if sentiment improves in the second half of the year. However, rents may continue to come under downward pressure in peripheral markets, particularly on the Iberian peninsula.
Figure 6
European commercial investment volumes € billion 40 35 30 25 20 15 10 5 0 Q2 Q3 2008
Q4
Q1
Q2 Q3 2009
Q4
Q1
Q2 Q3 2010
Q4
Q1
Q2 Q3 2011
UK Germany France Nordics Benelux Central/ Eastern Europe Source: Knight Frank Research/Real Capital Analytics
10
Office
4
6
8
Retail
10 12 14 16 18 20 Industrial
Hotel
Source: Knight Frank Research/Real Capital Analytics
however, the trends that characterised European markets in 2011 look set to continue over the next twelve months. Corporate occupiers will remain cautious and focused on saving costs and improving the efficiency of their leased space. Development completions will continue to be well below historical levels, albeit there are signs of construction activity increasing moderately in certain markets, including London and Warsaw.
Q1
2
Rest of Europe
Q4
Investment volumes in 2012 are expected to be at fairly similar levels to 2011, albeit there is potential for activity to improve in the second half of the year if economic conditions stabilise. There remains an appetite for prime property, particularly with prime yields currently offering a significant premium over historically low “risk free” rates. However, the availability of debt seems unlikely to improve significantly in the short-to-medium term, which will continue to restrict transactional activity. Cash-rich investors will remain in an advantageous position within the market, and the recent movement of capital into Europe from overseas sovereign wealth funds and pension funds, which has so far been largely concentrated in London, may spread further to other markets, particularly in France and Germany. With the majority of investors remaining cautious, demand will continue to be concentrated on perceived “safe havens” such as London, Paris and Germany. This should help to support prime yields in these markets at their current levels, although yields for secondary assets and properties in peripheral markets are likely to come under outward pressure in 2012. The divergence in the performance of prime and secondary property, which has characterised European markets over the last three years, is therefore expected to continue for the foreseeable future.
Rotterdam
11
2012 GLOBAL REAL ESTATE MARKETS Annual review and outlook
North America
United States US commercial real estate performance continued to improve in 2011, adding to the momentum spurred by the recovery in 2010. Investor interest, liquidity and leasing activity all combined to create a substantial tailwind that buoyed prospects for both the industrial and office sectors. Other positives, like reduced unemployment, higher market indices and headline-driven IPOs, combined to establish a firm foundation for the fundamentals to continue to improve into 2012.
12
The average asking rent for Class A office space in select US CBD markets at the end of 2011 improved to $40.42 per sq ft per annum from the 2010 year-end average of $37.83 per sq ft, a 6.8% increase that provided pricing strength to the market. The overall vacancy rate for office space in the select US markets finished at 13.4% at the end of 2011, compared with 13.8% at the end of 2010 and 13.7% at the end of 2009. Net absorption of office space in the select US markets was positive on the year at 8.5 million sq ft, an improvement over the 3.4 million sq ft of positive net absorption that took place in 2010, and the best yearly performance since 2006 when 18.0 million sq ft were removed from the market. Leasing activity totalled 36.0 million sq ft in 2011, representing a slight decline over the 37.3 million sq ft of leasing that took place in 2010. Between 2006 and 2009, leasing
US Class A CBD office average asking rents US$ per sq ft per annum 70 60 50 40 30 20
San Francisco
Philadelphia
New Jersey
Nashville
Miami
Manhattan
2010
Washington, DC
2009
Los Angeles
Houston
Denver
Dallas
Chicago
0
Detroit
10
Boston
Investment activity for industrial properties in the US also increased in 2011. A total of $24.4 billion in industrial sales took place during the year, compared with $13.7 billion in 2010. Volume has yet to reach the amount of activity seen from 2006 to 2009 when the market averaged an annual $40.4 billion of sales. The average sale price for industrial properties in the US was $55 per sq ft in 2011, the same as 2010, while the average cap rate was 7.5% compared with 8.1%.
Figure 8
Atlanta
In the office sector, $58.0 billion in sales volume took place in 2011 – more than doubling the $26.4 billion total for 2010, although still less than half of the $118.7 billion annual average volume seen from 2006 to 2008. Office sales averaged $207 per sq ft in 2011, a 21.8% improvement over the 2010 average price of $170 per sq ft, while the average cap rate for the office market in 2011 was 7.1% compared with 7.8% in 2010.
2011
Source: Newmark Knight Frank Research
convertible to cash, was $2.1 trillion, up 19.1% over the $1.8 trillion reported in the third quarter of the prior year. As companies begin to invest in growth, market activity will start to push upward. The US unemployment rate, which was 9.4% at the start of the year, finished the year at 8.5%, while job openings hit a nearly three-year high. There were 3.4 million jobs available at the end of December 2011, up from 3.1 million in the prior month, according
to the US Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey. Development of new office properties slowed as a total of 7.1 million sq ft of Class A office space were under construction in select US markets in 2011, the lowest yearly figure in well over a decade. This figure was less than half of the 14.7 million sq ft that were under construction in 2010, down significantly from the annual average of 35.0 million sq ft under construction between 2006 and 2009.
activity in these select markets averaged 30.8 million sq ft per year. Factors that influenced the market performance included improvement in the financial position of companies as shown by their total liquid assets. By the end of the third quarter of 2011, corporate assets were at their highest level in more than 50 years. The accumulation of cash, or assets easily
New York
13
2012 GLOBAL REAL ESTATE MARKETS Annual review and outlook
The US industrial market experienced a
2010, and was the best performance since
higher than the asking rent of the prior
bounce in the fourth quarter of 2011 as 25.7
2007 when 98.2 million sq ft were removed
quarter and the end of 2010, both of which
million sq ft of net absorption took place,
from the market.
nearly matching the results from the prior two
reported $4.87 per sq ft. Leasing activity in US industrial properties was 294.5 million
quarters of 26.7 million sq ft. The 2011 total
The US industrial vacancy rate fell to 12.1% at
sq ft in 2011, compared with 428.1 million
net absorption was positive as 62.7 million
the end of the year, down from 12.5% at the
sq ft in 2010 and the annual average of 320.9
sq ft were removed, reversing conditions that
end of 2010. The 2011 year-end average
million sq ft leased between 2006 and 2009.
saw 9.3 million sq ft returned to the market in
asking rental rate was $4.90 per sq ft, slightly
The industrial market continued with the rehabilitation of existing infrastructure and the continued attrition rate of performing
Figure 9
assets. New construction in 2011 in the
US Class A CBD office vacancy rates
industrial sector remained well off the
%
previous decade’s pace. At the end of the
35
year, a total of 17.1 million sq ft of new
30
industrial space was delivered in the US, a slight increase over the 15.9 million sq ft that
25
were delivered in 2010 and still significantly
20
lower than the annual average of 105.1 million sq ft of industrial space that were delivered
15
between 2006 and 2009.
10
Sustainability and energy efficiency carried the upbeat tone in the market throughout
5 San Francisco
Philadelphia
New Jersey
Nashville
Miami
Manhattan
2010
Washington, DC
2009
Los Angeles
Houston
Detroit
Denver
Dallas
Chicago
Atlanta
Boston
2011 with an emphasis on properties
0
2011
associated with LEED, also known as the green office market. The national green office market strengthened in 2011 as the vacancy rate improved to 13.4% at the end of the year from the 14.9% rate at the end of 2010. Net absorption totalled 2.1 million sq ft in 2011,
Source: Newmark Knight Frank Research
adding to the 1.7 million sq ft removed from the market in 2010. The average asking rent for green office space at the end of 2011 was
Figure 10
US industrial average asking rents
$39.54 per sq ft, down from the $39.79 per
U$ per sq ft per annum
sq ft average at the end of 2010.
14
By the end of 2011, conditions for office space
12
in the Atlanta market showed signs of improvement with total net absorption of
10
55,878 sq ft. Although positive for the year, the net absorption total was below the level
8
seen in 2010 when 169,093 sq ft of positive
6
net absorption took place. The average asking rental rate declined throughout the year,
4
finishing 2011 at $19.54 per sq ft, compared
2
with $19.70 per sq ft at the end of 2010. The
Source: Newmark Knight Frank Research
14
2011
San Francisco
Philadelphia
New York City
New Jersey
Nashville
Miami
2010
Washington, DC
2009
Los Angeles
Houston
Denver
Dallas
Chicago
Boston
Atlanta
Detroit
vacancy rate was 19.9% at the end of 2011, an
0
improvement from the 20.8% vacancy rate reported at the end of 2010. Based on dollar volume, the Atlanta office market experienced tremendous year-overyear growth in investment activity in 2011. Following a weak year in 2010 with $385
million in sales transactions closed, 2011 ended with $1.4 billion in closed deals, a 270% increase in dollar volume. The average price per sq ft paid grew to $120 per sq ft in 2011 from $98 per sq ft in 2010. The average cap rate for office properties sold in 2011 was 7.7%, compared with 8.4% in 2010. CMBS debt totalling $4.6 billion was secured by office properties in the Atlanta market by the end of 2011. Of the $4.6 billion outstanding, nearly $1.6 billion, or 34%, was considered delinquent by the end of the year. The vacancy rate for office properties in Boston settled at the end of 2011 at 11.8%, following rates as high as 13.0% earlier in the year, and remained above the 11.2% rate reported at the end of 2010. The average asking rent grew to $43.51 per sq ft by the end of 2011, improving 2.6% from the $42.39 per sq ft rate reported at the end of 2010. The year-end net absorption total for office space in Boston was positive at 472,342 sq ft in 2011, a considerable
Boston
improvement from the combined 1.8 million sq ft of negative absorption which took place
level seen since mid-2009. Average asking
finishing the year at $20.83 per sq ft, a 1.4%
rents in the Chicago market fell to $31.34 per
decline from the average reported at the end
sq ft at the end of 2011 from $31.79 per sq ft
of 2010. The Dallas vacancy rate ended 2011 at
were delivered to the market, while another
reported at the end of 2010.
25.6%, its highest level since 1997 and one of
580,000 sq ft remained under construction.
In 2011, office investment activity in Chicago
in 2009 and 2010. In 2011, 700,000 sq ft of new office space
Little development has taken place over the past few years, with 920,000 sq ft of space delivered to the market in the past five years.
grew by more than 20.0% from the previous year as $3.3 billion worth of transactions were closed, the highest level seen in this market
By comparison, from 2001 to 2006, a total of
since 2007. The average sale price for office
3.4 million sq ft of new space was delivered to
properties in Chicago in 2011 was $164 per
the market.
sq ft, a drop from the $182 per sq ft rate seen
The average asking rent for green office space
in 2010. The average cap rate for the year was
the highest office vacancy rates within the US CBD marketplace. The third quarter of 2011 was the only quarter in the year to post positive absorption, bringing the year-end total for net absorption to negative 258,815 sq ft, retreating further from the 133,012 sq ft of negative net absorption in 2010.
in Boston finished 2011 at $47.48 per sq ft,
7.4%, down from 7.9% in 2010.
Although development of new office towers
which stands at 9.1% over standard Class A
The Chicago industrial market, one of the
slowed in 2011, investment activity grew in the year as more than $120 million in sales
office spaces in the Boston market. The
largest in the US, finished 2011 with a vacancy
vacancy rate for green office space ended the
rate of 14.4%, an improvement over the 15.5%
activity took place, from a nearly inactive
year at 11.1%, almost 200 bps above the 9.3%
rate reported in 2010 and its lowest level
2010. One of the largest leasing transactions
rate reported in 2010. A total of 662,000 sq ft
since 2009. The average asking rent for
in 2011 was for the advertising firm
of transactions were signed for green office
industrial space reached $4.17 per sq ft at the
TracyLocke. The firm signed a renewal lease
space in 2011.
end of the year, up slightly from $4.13 per
for 112,000 sq ft at 1999 Bryan Street in the
sq ft reached in 2010. Ozburn Hessey
Dallas CBD.
The 2011 year-end total for net absorption in the Chicago office market was positive at 787,033 sq ft, adding to the 605,296 sq ft of positive net absorption in 2010. The vacancy rate in the market finished 2011 at 14.6%, a
Logistics signed one of the largest industrial leases in the Chicago market in 2011, inking a deal for 477,000 sq ft at 2780 McDonough Street.
Delinquencies of CMBS debt on Dallas office properties stood at 12.5% or $516 million by the end of 2011. $4.2 billion of securitised debt remained outstanding by the end of
slight improvement over the 14.8% rate
The average asking rent in the Dallas office
2011, 88% of which was originated prior
reported at the end of 2010, and the lowest
market remained nearly flat throughout 2011,
to 2009.
15
2012 GLOBAL REAL ESTATE MARKETS Annual review and outlook
Chicago
In the Houston office market, 2011 marked a year of new construction and active leasing. The year-end total for net absorption was positive at 842,400 sq ft, compared with the negative 240,345 sq ft of net absorption in 2010. By the end of 2011, leasing activity had
improved to nearly 3.2 million sq ft, a level not seen since 2006 when 3.4 million sq ft of transactions took place. The vacancy rate in the market finished the year at 10.6%, an increase from the 8.6% rate reported at the end of 2010, as 1.8 million sq ft
Figure 11
The Houston market is home to the fourth largest green office market in the US. In the past year, more than 1.8 million sq ft of green office space was delivered to the market. The vacancy rate ended 2011 at 9.3%, 130 bps below the overall vacancy rate. The average asking rent for green spaces ended the year at $37.19 per sq ft.
US industrial vacancy rates % 25 20
15 10
Source: Newmark Knight Frank Research
16
2011
San Francisco
Philadelphia
New York City
New Jersey
Nashville
Miami
2010
Washington, DC
2009
Los Angeles
Houston
Denver
Dallas
Chicago
Boston
Atlanta
Detroit
5 0
of new construction was completed and brought to the market. The average asking rent rose to $36.02 per sq ft at the end of 2011, from $35.68 per sq ft reported in 2010. One of the largest transactions of the year was signed by Shell Oil Company. The company signed a renewal lease for nearly 800,000 sq ft of space at 910 Louisiana Street.
The office market in Los Angeles saw declining conditions during 2011, with the exception of asking rents which grew to $34.18 per sq ft from $33.37 per sq ft reported at the end of 2010. The market vacancy rate rose to 16.0%, compared with 14.3% at the end of 2010, reaching the highest rate in the market since the end of 2004. The year-end total for net absorption was negative 381,515 sq ft, making 2011 the fourth consecutive year to post negative net absorption. By the end of 2011, nearly
8 6 4
Nashville
New Jersey
Philadelphia
San Francisco
Washington, DC
New Jersey
Philadelphia
San Francisco
Washington, DC
Miami
Manhattan
2010
Nashville
2009
Los Angeles
Houston
Detroit
Denver
Dallas
Chicago
0
Boston
2
2011
Source: Newmark Knight Frank Research/Real Capital Analytics
Figure 13
US average industrial cap rates % 12 10 8 6 4
2009
2010
Miami
Manhattan
Los Angeles
Houston
0
Detroit
2
Denver
While several Class A projects remain in the planning stages in Midtown, 1.8 million sq ft of Class A space is scheduled to be delivered to the market in the next two years. In 2010, the tower at 11 Times Square was completed and delivered to the market, adding 1.1 million sq ft of Class A office space.
10
Dallas
leasing activity over the past 10 years has been 14.4 million sq ft.
%
Chicago
Leasing activity in Manhattan slowed a little in the second half of 2011, following a strong first half in which 9.5 million sq ft of leasing activity took place. By the end of the year, 16.3 million sq ft of leasing transactions took place compared with 18.9 million sq ft reported in 2010. The annual average for
US average office cap rates
Boston
As one of the stronger performing US office markets, conditions in Manhattan showed signs of improvement in 2011. The average asking rent rose by the end of 2011 to $66.48 per sq ft from $61.44 per sq ft, an 8.2% increase year over year. The year-end total for net absorption was positive 3.7 million sq ft, 3.2 million of which occurred in the first half of the year. By comparison, the 2010 year-end total was positive 3.0 million sq ft. The vacancy rate improved by the end of 2011 to 7.1% from 7.3% reported at the end of 2010, and remained above the 6.9% rate reported in 2009.
a little in 2011 as the year-end total ended at positive 61,681 sq ft. The average asking rent in the market ended the year at $42.08 per sq ft, a slight drop from the $42.53 per sq ft rate reported in 2010, and remained 6.6% below the market peak reached in 2008. Rents in the Miami office market are among the top five highest in the country.
Figure 12
Atlanta
As the second largest in the nation at nearly 490 million sq ft, the Los Angeles industrial market did not fare much better than the office market throughout 2011. In the fourth quarter of 2011, 624,155 sq ft of positive absorption took place. While positive for the quarter, the year-end total for net absorption was negative 2.8 million sq ft. As with the office market, 2011 marked the fourth consecutive year of negative net absorption. The vacancy rate for industrial properties in Los Angeles ended the year at 6.5%, compared with 6.1% at the end of 2010. Average asking rents finished the year at $6.36 per sq ft, down from $6.40 per sq ft at the end of 2010, and were 19.5% below the market high of $7.90 per sq ft reported in 2008.
Conditions in the Miami office market improved by the end of 2011 as the vacancy rate fell to 22.3% from 23.1% reported at the end of 2010. The vacancy rate in Miami has been above the 22.0% mark since the beginning of 2010. Following a strong finish to 2010 with positive net absorption of 120,490 sq ft, the pace of absorption slowed
Atlanta
2.0 million sq ft of office leasing transactions took place, compared with the 2.2 million sq ft which took place in 2010.
2011
Source: Newmark Knight Frank Research/Real Capital Analytics
17
2012 GLOBAL REAL ESTATE MARKETS Annual review and outlook
Canada
Figure 14
US Class A CBD office rents, annual change, Q4 2010 to Q4 2011
The Canadian economy performed
% San Francisco Manhattan Boston Los Angeles Houston Nashville Denver Washington, DC Philadelphia Dallas Detroit Atlanta Chicago Miami New Jersey
-5
0
5
10
15
20
25
Source: Newmark Knight Frank Research
solidly throughout 2011, despite the difficulties experienced elsewhere in the world. Foreign trade accounts for approximately 45% of the country’s GDP, and an improving economic outlook in the United States bodes well for maintained economic stability throughout 2012. According to Statistics Canada, the country’s economy grew by 2.5% in 2011, down from 3.2% in 2010, but surpassing economists’ earlier forecasts. Over the course of the year, all major sectors posted gains, with mining, oil and gas extraction, construction, public sector spending and manufacturing leading the way.
In 2011, nearly $360 million in investment
improvement over the past year. Nearly 3.3
sales activity took place, an increase over the
million sq ft of green office leasing
$220 million of activity seen in 2010. The
transactions took place in 2011, compared
average price per sq ft also increased to $166
with 3.0 million sq ft in 2010.
per sq ft from $127 per sq ft in 2010. One of
As of March 2012, the Canadian dollar was trading above par with its US counterpart, which causes challenges for the country’s exporters, and the consensus is that
Following a rough first half of 2011 in the
annualised GDP growth will slow in 2012, with
Washington, DC market as nearly
forecasts coming in at around 2.0%. Overall
33,000 sq ft at 100 SE 2nd Street.
330,000 sq ft of negative absorption took
unemployment levels are expected to remain relatively stable, at approximately 7.5%.
Following the effects of the economic
place, the second half of the year appeared to rebound as 280,572 sq ft of positive
the larger leases signed in 2011 was for the General Services Administration for
downturn, the San Francisco office market has been surging over the past year. Leasing activity in the market grew to nearly 5.6 million sq ft in 2011 from 4.7 million sq ft of
absorption took place. The vacancy rate for the market ended 2011 at 13.7%, rising above the 12.8% rate reported at the end of 2010.
The overall Class A and B vacancy rate in Canada’s major cities stood at 4.7% at the end of 2011, down from 6.8% a year earlier. In most major cities, office space, especially
transactions in 2010. The year-end total for
The average asking rent in Washington, DC
high quality space in new towers, continues
net absorption finished the year at
ended 2011 at $54.74 per sq ft, up 1.4% from
to be leased at an accelerated rate. Indeed,
924,752 sq ft, compared with the negative
the $53.98 per sq ft average at the end of
while vacancy rates declined by over 200
218,235 sq ft of net absorption in 2010.
2010. The average asking rent in the market
Average asking rents in San Francisco grew
has been more resilient to the declines seen
bps in 2011, the total inventory of built space increased by nearly 2 million sq ft, most of
in other major markets over the past few
this coming online in Calgary and Toronto.
years. Average asking rents have actually
In 2012, it is expected that there will be
grown 2.3% since 2008. Leasing activity was
positive space absorption in virtually
robust in 2011 as 2.0 million sq ft of leases
all of Canada’s major cities, more new
were signed. This level of leasing activity has
office tower developments and upward
not been seen in the Washington, DC office
pressure on asking rents in most cities as
reached at the end of 2010, and the lowest
market since 2003.
space availability continues to decline.
level since 2008.
Construction activity in the Washington, DC
Montreal’s combined Class A and B vacancy
In the San Francisco green office market, the
market remained strong over the past two
rate fell from 7.7% to 5.9% in 2011, and Class
average asking rent rose to $41.31 per sq ft at
years with more than 1.0 million sq ft of new
A rates dropped from 6.8% to 6.2%. With the
the end of 2011, indicating a 23.2% climb
space brought to the market. In the
decline in vacancy rates, asking net rental
from the $30.01 per sq ft rate reported in
investment sales arena, average cap rates in
rates began to creep upward by the year-end.
2010. The vacancy rate improved to 9.8% from
2011 were 6.0%, a slight drop from the 6.5%
Development and pre-development activity
12.6% in 2010, making San Francisco one of
seen in 2010, as investors continue to seek
is energising the downtown real estate
the leading green markets for vacancy
out prime properties in core markets.
market, and the imminent announcement of
25.3% to $40.77 per sq ft from $32.53 per sq ft reported at the end of 2010. Rents in this market still remain below the peak of $72.44 per sq ft reached during the dot-com period in 2000. The vacancy rate finished the year at 10.4%, nearly 200 bps below the 12.1% rate
18
at least two new projects is expected. This
Toronto’s office market is the largest
Class A buildings. As a consequence, tenants
is significant news, as there have been only
in Canada, with a total inventory of
are turning to Class B properties for office
two major office building projects in the
approximately 62 million sq ft of Class A
space, where there is somewhat greater
Greater Montreal area in the last decade, with
and B space in the downtown district. The
availability, but even in this space class
the completion of Phase 2 of E-Commerce
downtown office market is very much in
asking rents are rising rapidly. A number
growth mode; over the past three years,
of new developments are planned or in
Canada campus on Nun’s Island in 2009.
more than 3.5 million sq ft of new space
progress, which should bring 3.5-5.0 million
Ottawa, as the nation’s capital, is generally
has been delivered to the market. Most of
sq ft to the downtown market, but nothing
this new space has been absorbed, and the
will be completed before mid-2014, so the
Class A vacancy rate at the end of 2011 was at
market will remain exceedingly tight.
Place in 2004 and the delivery of the Bell
protected from economic downturns by the tenancies of the federal government, and
4.5%, down from 6.3% a year earlier. In the
downtown Class A vacancy rates dipped
new towers, where demand continues to be
as low as 4.0% at the beginning of 2011.
strong, landlords will be focused on filling
However, the completion of a major new
the remaining smaller pockets of space and
office tower, coupled with the federal
should be able to achieve healthy rents as
government’s decision to address some of
demand is currently outstripping supply.
its space needs outside of the downtown
However, there are still leasing opportunities
core, caused vacancy rates to skyrocket
in the older Class A space that has been
to 8.0% at the end of 2011. It remains to
freed up by tenants relocating to the new
be seen how announced federal spending
towers. The substantial demand for the new
reductions will further impact downtown
breed of office space has led to late-stage
Vancouver continues to experience an office space squeeze in the downtown core. The combined Class A and B vacancy rate was a very low 2.9% at the end of 2011, and there is little relief in sight for tenants. Larger blocks of available space, greater than 20,000 sq ft, are extremely rare, and asking rents are rising. There are new developments in the pipeline, which will provide over 1 million sq ft of high quality inventory, but none of these projects are
occupancy rates. In the western region of
discussions for further development projects.
the Greater Ottawa area, where there is a
Calgary’s office market has surged over the
As has been the case for the past few years,
strong concentration of hi-tech businesses,
past two years, and occupancy rates now
tenants will find more abundant leasing
vacancy rates at the end of 2011 were 13.7%.
approach 100% in the downtown core’s
opportunities in the suburban markets.
scheduled to be completed until mid-2014.
Montreal
19
2012 GLOBAL REAL ESTATE MARKETS Annual review and outlook
Middle East
The Middle East remains overshadowed by the political upheaval taking place in a number of countries, which has led to considerable caution over the outlook for business and investment. Nonetheless, the IMF estimates that GDP growth for the region was a solid 4.9% in 2011. Looking forward, growth in 2012 is expected be lower at around 4%, although there remains a considerable degree of uncertainty surrounding the wider global economy and the ongoing push towards greater democracy across the region.
20
Figure 15
Figure 16
Middle East prime office rents
Middle East prime office yields
US$ per sq m per annum
%
800
10
700 8
600 500
6
400 4
300 200
2
Kuwait City
Muscat
Doha
Dubai
Abu Dhabi
Riyadh
0
Manama
Muscat
Kuwait City
Manama
Riyadh
Doha
Abu Dhabi
0
Dubai
100
Source: Knight Frank Research
Source: Knight Frank Research
In addition to economic and political headwinds, the oversupply of commercial space has been a major issue in some locations. In Bahrain, for example, office vacancy rates in Manama have reached very high levels after rising consistently since 2008. While the development pipeline has slowed, it is estimated that it will take around five years for current supply to be absorbed.
Tourist numbers have fallen dramatically over the last year, leading to reduced retail sales. While occupancy levels in the largest prime malls have remained above 90%, many tenants have been encouraged to renew leases through lower rents. However, some retail schemes at the middle-to-lower end of the market are now experiencing much higher vacancy rates of up to 60%.
The impact of civil unrest has been most evident in the retail sector, which is heavily driven by weekend visitors from Saudi Arabia.
In Bahrain’s industrial sector, while there has been a significant drive to allocate land for industrial use and strong interest from local
The political turbulence in the Middle East has impacted markets already affected by high vacancy levels
and regional occupiers, demand for high specification warehousing space is currently limited. In Dubai, the office occupier market has struggled for a number of years, although an increase in activity was recorded in late 2011 and early 2012, in part due to the Arab Spring. Dubai’s “safe haven” status in the Gulf has led to a number of companies expanding and consolidating their operations in the Emirate. As prime headline rents are nearing the bottom of the current cycle, the more astute
Manama
21
2012 GLOBAL REAL ESTATE MARKETS Annual review and outlook
occupiers are aware of this and are trading up in order to secure best deals. In contrast, rents in secondary locations are still experiencing downward pressure, notably with vacancy rates across the city remaining at very high levels. For many retailers, Dubai remains the major entry point into the wider Middle East, attracted by the presence of western-style mega-malls, high spending power and a young population eager for new brands. Large regional malls account for 60% of retail space, although an increasing number of smaller community malls are being developed. Rents have not moved significantly over the year, although prime schemes recorded a modest degree of growth, while more secondary schemes saw rents edge down.
Abu Dhabi
22
As in much of the region, Dubai has a limited supply of good quality industrial and logistics stock for which there is strong competition. As a result, many occupiers are seeking pre-let options in order to secure better quality, purpose-built units. The Abu Dhabi office occupier market remains subdued as a result of the current economic climate, with requirements averaging around 250 sq m. Supply increased significantly in 2011, with the delivery of over 300,000 sq m of new Grade A space. The retail market remains active, although there are limited opportunities in the traditional downtown areas to source the quality of space required by international brands. Rents remain stable, with forthcoming developments expected to soon provide retailers with new opportunities.
In Abu Dhabi’s industrial market, rents are expected to fall further as more stock enters the market, although the better quality stock coming through should mitigate the extent of any declines. In the Middle East as a whole, investment activity remains generally muted, with most investors adopting a “wait-and-see” approach to see how political events play out. However, given the sharp correction in rental levels seen in the last 2-3 years and the softening in property yields which are now in the range of 8-9%, the region offers some potentially very attractive investment opportunities.
Dubai
23
2012 GLOBAL REAL ESTATE MARKETS Annual review and outlook
Africa
Many African economies continued to grow at an impressive speed in 2011, with the global slowdown having a relatively limited effect on the continent. The IMF estimates that GDP growth in Sub-Saharan Africa was approximately 4.9%, however growth in North Africa decelerated sharply to around 2.0% as a result of the economic impact of the Arab Spring.
24
Figure 17
Africa prime office rents US$ per sq m per annum 2,000
1,500
1,000
Blantyre, Malawi
Nairobi, Kenya
Harare, Zimbabwe
Lilongwe, Malawi
Cape Town, South Africa
Gaborone, Botswana
Durban, South Africa
Johannesburg, South Africa
Kampala, Uganda
Dar es Salaam, Tanzania
Lusaka, Zambia
Cairo, Egypt
Lagos, Nigeria
0
Luanda, Angola
500
Economic growth and inward investment have continued to support the development of Africa’s property markets
Source: Knight Frank Research
While high commodity prices have buoyed
shopping centres, targeted at Africa’s
several very large projects aimed at improving
growth in Sub-Saharan Africa, its economies
growing middle class, continue to be built
the city’s built environment are in the
have also been aided by advances in
across the continent.
pipeline, including Eko Atlantic City and the
technology and communications, improved regional trade integration and increased political stability in a number of countries. GDP growth of over 6% was estimated in 2011 not only in oil-rich West African countries such as Nigeria and Equatorial Guinea, but also in East African nations including Tanzania and Uganda. The IMF forecasts that annual GDP growth in
Luanda, Angola, and Lagos, Nigeria, are
Lekki Free Trade Zone.
among the most expensive cities in the world
The development of the new Central Business
in which to rent offices, with both markets
District in Gaborone, Botswana, is expected
having a very limited supply of high quality
to have a major impact on the city’s office
space able to meet the requirements of
market in the coming years. While a limited
international occupiers, particularly those
amount of space has been completed so far in
from the oil and gas industries. Lagos
the new district, nearly 90,000 sq m of offices
continues to be severely affected by
are due to be delivered in 2012, most of which
overcrowding and poor infrastructure, but
will be completed on a speculative basis.
Sub-Saharan Africa will continue to run at above 5% over the next five years, although serious challenges, including infrastructure difficulties and skills shortages, remain present in many countries. Any slowdown in China’s economic growth would also cause concern, as it has become a hugely important trade partner and investor in Africa. The economic development of Africa has supported the growth of its commercial property sector. However, outside of South Africa, property markets generally remain small and underdeveloped, with many major cities having a limited stock of high quality office space. African retail property markets continue to grow; while small-scale informal retail activity remains very common, modern
Cape Town
25
2012 GLOBAL REAL ESTATE MARKETS Annual review and outlook
Cairo
A number of major occupiers, from both the private and public sector, are planning to move to the new CBD, which may cause availability to increase in the city’s existing business parks. In Lusaka, Zambia, over 14,000 sq m of new office space is currently under construction and expected come to the market in 2012. While Zambian tenants remain reluctant to pre-let space, there has been increased evidence of pre-let demand from international companies entering the Zambian market. Lusaka’s retail sector has continued to grow, with Levy Business Park and Makeni Junction adding approximately 40,000 sq m of new retail space in 2011, but no new retail schemes are due for completion in 2012.
of the space being let to tenants moving from dilapidated premises. Several major office schemes are currently under construction the city, with development activity being encouraged by strong occupier demand and a lack of available space in the CBD. Office market activity in Harare, Zimbabwe, has been restricted by the recent liquidity crisis in the country’s economy. The highest office rents are currently recorded in suburban business parks, while the CBD continues to see significant vacancy rates. Demand for retail space has remained relatively strong, in both the CBD and better quality suburban shopping centres. This has put some upward pressure on retail rents, albeit increases are likely to be limited by the low spending power
There is currently a surfeit of Grade B offices available in Kampala, Uganda, with vacancy rates for such space currently standing at approximately 30%. Occupation costs have risen considerably as a result of increased power outages, which have necessitated the use of standby generators for longer periods.
of much of the population.
A number of new office projects were delivered to the market in Dar es Salaam, Tanzania, in the second half of 2011, with most
there are ambitious plans for several
26
In Nairobi, Kenya, significant volumes of new office space have continued to be delivered to the market, most of which have been well-let. New completions in 2011 included 14 Riverside, with approximately 30,000 sq m of commercial space. Over the longer term, large-scale urban developments in Kenya, notably TATU City and Konza Technology City.
Of Malawi’s two largest cities, Lilongwe has seen a greater level of office development activity in recent years than Blantyre, where availability rates are high. In the retail sector, the 18,000 sq m Gateway Mall, which will be Malawi’s largest shopping centre when completed, is currently under construction in Lilongwe and due for completion in 2013. Occupier demand for office space in South Africa was fairly subdued in 2011, and vacancy rates drifted upwards during the year in many of the country’s major cities. While prime office rents were generally stable, rents for lower quality space came under downward pressure. In Johannesburg, demand has been strongest in decentralised nodes including Illovo and Sandton, and these areas have been able to command higher rents than the CBD. While vacancy rates rose in most of Cape Town’s submarkets during 2011, the availability of premium grade space has remained low. In Durban, demand has been healthy in the Umhlanga/La Lucia Ridge area, but the CBD has continued to record high vacancy rates.
Durban
27
2012 GLOBAL REAL ESTATE MARKETS Annual review and outlook
Asia-Pacific
Asia-Pacific led global economic growth in 2011, with GDP for the region as a whole rising by 6.2% according to IMF estimates. However, growth slowed by the end of year in many parts of Asia, with mounting global economic uncertainties, particularly in the Eurozone, dampening international demand for Asian exports. Government measures aimed at tackling high inflation and the risk of a residential property market bubble have also affected economic activity in markets including China, India, Singapore and Hong Kong.
28
Office vacancy rates have fallen below 5% in Shanghai and Beijing, putting upward pressure on rents
Figure 18
Asia-Pacific office vacancy rates % 35 30 25 20 15 10
Q4 2010
Hong Kong
Perth
Shanghai
Beijing
Melbourne
Brisbane
Jakarta
Seoul
Tokyo
Sydney
Singapore
Bangkok
Bangalore
Ho Chi Minh City
New Delhi
Guangzhou
Mumbai
Kuala Lumpur
0
Hanoi
5
Q4 2011
Source: Knight Frank Research
Some moderation in economic growth is
two of the first major global office markets to
limited development completions. The Beijing
expected in Asia-Pacific in 2012, albeit it
see rents reach their peak in the current cycle,
market recorded exceptionally strong rental
should remain the fastest expanding region
and recorded falls in prime rents in the final
growth in 2011, with prime rents rising by
of the global economy. The IMF anticipates
quarter of the year.
46%. Beijing and Shanghai are both forecast
that GDP growth in China will ease from 9.2% in 2011 to 8.2% in 2012; likewise, growth in India is forecast to fall from 7.4% to 7.0%.
The major office markets of mainland China performed strongly in 2011, in sharp contrast to the residential property sector, which saw
Demand for office space in the region was
prices decrease as a result of government
affected by global economic concerns towards
moves aimed at cooling the market. Prime
the end of 2011, particularly in cities most
office rents rose rapidly in Shanghai and
closely integrated with international financial
Beijing, and vacancy rates fell below 5% in
markets. Hong Kong and Singapore became
both cities, driven by strong demand and
to see continued rental growth in 2012. The rapid growth of China’s retail market and the rising spending power of its consumers have continued to attract investors and developers. A notable example is the Singaporean mall owner CapitaMalls Asia, which has quickly expanded its operations in China, and now has interests in more than 50 shopping centres in the country. International retailers continue to grow their presence in China; during 2011, IKEA opened its secondlargest store in the world in Shanghai, US clothing retailers Hollister and American Eagle Outfitters launched their first shops in mainland China, while luxury retailers Dior and Marni opened new flagship stores in Beijing. Following two years of exceptional growth, prime office rents peaked in the Central district of Hong Kong in the second half of 2011, and rental falls were recorded in the final four months of the year. Hong Kong’s exposure to global economic headwinds has engendered increased occupier caution, and a growing
Shanghai
number of tenants have sought to reduce their operating costs by moving to less expensive
29
2012 GLOBAL REAL ESTATE MARKETS Annual review and outlook
Figure 19
Financial Center project, which will include a
Asia-Pacific prime office rents
total office space of 328,000 sq m in three
US$ per sq m per annum
towers when complete.
1,800
Grade A vacancy levels have remained high in
1,600
Hanoi and Ho Chi Minh City, keeping prime
1,400
rents under downward pressure. The Grade A
1,200
vacancy rate in Hanoi rose sharply to reach 33% at the end of 2011, mainly due to the
1,000
delivery of a large volume of new space in the
800
west of the city. In HCMC, the Grade A vacancy
600
rate is 14%, but this figure is skewed by the
400
Bitexco Financial Tower, a 262 metre tall
200
Q4 2010
Kuala Lumpur
Jakarta
Bangalore
Phnom Penh
Bangkok
Guangzhou
Seoul
Hanoi
Shanghai
Ho Chi Minh City
Melbourne
New Delhi
Beijing
Mumbai
Brisbane
Sydney
Perth
Singapore
Tokyo
building opened in 2010, which remains less Hong Kong
0
Q4 2011
cost-conscious tenants. The opening of the
to fall by 10-15% during 2012, but rents should
138,600 sq m Sumitomo Fudosan Shinjuku
remain firm in non-core districts such as
Grand Tower added to availability in Tokyo
Causeway Bay, Quarry Bay and Wan Chai.
towards the end of 2011, and vacancy rates
continued to perform well, buoyed by strong
may edge further upwards with a significant
The outlook for Singapore’s trade-based economy has worsened, with government
rose by around 20% in 2011, and further
forecasts suggesting that GDP growth will
growth is anticipated in 2012 with
slow from 4.8% in 2011 to no more than 3%
international retailers maintaining an interest
in 2012. This is expected to cause office
in expanding into Hong Kong’s major
occupiers to rein in their expansion plans and
shopping centres. The Hong Kong retail sector
office market activity is likely to weaken in the
also provided the largest global commercial
next year. Prime office rents began to fall in
property investment transaction of 2011, with
the final quarter of 2011, and are forecast to
the sale of Festival Walk shopping centre to
decrease by up to 15% over the course
Mapletree Investments for HK$18.8 billion
of 2012.
helped to push the vacancy rate down to
somewhat in 2012 as a result of concerns in the global economy, most of the new space expected to be delivered to the market over the next 12 months is already pre-let, which will help to support occupancy levels.
Grade A office rents in Seoul have continued on a downward trend in the face of relatively
Following the devastating earthquake in
weak demand and rising levels of new supply.
March, the Japanese economy picked up well
There were a number of large completions in
in the third quarter of 2011, but activity
the CBD during 2011, while the Yeouido
weakened again in the final quarter, with
Business District will also see major deliveries
exports hit by slowing global trade. Prime
over the next two years, most notably the
office rents in Tokyo remain under moderate
Federation of Korean Industries Hall, with a
downward pressure, with landlords needing
floor space of 169,000 sq m, and Two IFC and
to offer competitive rents in order to attract
Three IFC, part of the mixed-use International
30
Strong demand for office space in Jakarta
in 2012.
arrivals from the mainland. Prime retail rents
initial yield of c.4.5%.
a new benchmark for prime offices in HCMC.
number of projects due for completion
private consumption and increased tourist
(c.US$2.4 billion), reportedly reflecting an
reflected a yield of approximately 8.5%, setting
earlier. While demand is expected to weaken
offices. Prime rents in Central are anticipated
market has cooled, the retail sector has
Tower to the Japanese investor Daibiru
6.3% at the end of 2011, from 11.9% a year
Source: Knight Frank Research
While sentiment in the Hong Kong office
than 50% occupied. The recent sale of Saigon
Jakarta
Phnom Penh Tower was completed in 2011, while the 39-storey Vattanac Capital Tower, due for completion in 2012, is expected to set new standards of quality for Cambodian offices. Asking rents for the new Grade A space are significantly higher, at US$20-25 per sq m per month, than those achieved in existing Grade B buildings, where rents are typically US$9-15 per sq m per month. The major Indian office markets have seen a gradual recovery in demand over the last two years, albeit vacancy rates remain high in many locations. The majority of leasing activity within the National Capital Region during 2011 occurred in peripheral business districts such as Noida and Gurgaon, while a
Tokyo
limited number of transactions were recorded in the New Delhi CBD, due to a lack of Prime office rents in Kuala Lumpur remained flat over the course of 2011. Office leasing activity was healthy, driven by the oil and gas and financial sectors, but the vacancy rate edged up to 20%. With a significant amount of new space due for completion over the next twelve months, rental growth is not expected in 2012. Occupier demand in the Bangkok office market has remained robust and largely unaffected by the severe floods seen in
Thailand in the second half of 2011. However, the floods have had a greater impact on the industrial sector, causing considerable damage and disruption to many industrial estates and factories. In some cases, industrial occupiers are considering relocating operations to less flood-prone areas, either within Thailand or in other countries.
available space. Prime office rents were either
The Grade A office market in Phnom Penh remains in its infancy, although the 22-storey
office rents were flat over the course of 2011 in
stable or showed modest rises across the NCR’s submarkets in 2011. The Mumbai office market was relatively subdued in 2011, with occupiers from the business, financial and insurance sector, traditionally the major drivers of the market, accounting for a reduced share of leasing activity compared with recent years. Prime Nariman Point, the central business district, while modest rises were recorded in western suburbs such as Malad and Andheri. High
Figure 20
vacancy rates and a large development
Asia-Pacific commercial investment volumes
pipeline are likely to keep rental levels in
US$ billion
Mumbai under downward pressure in 2012. The Bangalore office market rebounded in
30
2011, with prime rents rising by 10% in the 25
CBD and by around 15% in Whitefield and Electronic City, submarkets favoured by IT
20
occupiers.
15
The Indian organised retail sector showed signs of recovery in 2011, with increased
10
demand noted in a number of cities, although retailers remain cautious about expansion.
5
Several major markets are expected to see increased new supply over the next year, as
0 Q1
Q2 Q3 2008
Q4
Q1
Q2 Q3 2009
Q4
Q1
Q2 Q3 2010
Q4
Q1
Q2 Q3 2011
Japan China Australia Hong Kong South Korea Singapore Rest of (Mainland) South East Asia Office, retail, industrial and hotel transactions only Source: Knight Frank Research/Real Capital Analytics
Q4
developers gradually restart projects that had been delayed during the global economic
India
downturn. Significantly, though, the Indian government suspended plans to open up the retail market to foreign investment in late 2011.
31
2012 GLOBAL REAL ESTATE MARKETS Annual review and outlook
Demand for office space in Sydney remains relatively patchy, although prime accommodation has been surprisingly resilient in the face of reduced business confidence caused by the uncertainty in the global economy. The vacancy rate stood at 9.6% at the year-end, an increase from 8.3% at the start of 2011 caused primarily by the completion of several large new developments in the first half of the year. In Melbourne, the office vacancy rate fell from 6.6% to 5.3% during 2011, although the rate at which availability fell slowed during H2 as leasing activity softened. In both Sydney and Melbourne, demand is strongest for offices at the prime end of the market, particularly space with large contiguous floor plates. The Brisbane and Perth markets have both benefitted from increased demand from Australia’s booming resources sector. In Brisbane, the vacancy rate fell steadily in
Marginal rental increases were recorded in the Australian industrial sector in 2011, with demand for the limited available prime space remaining strong. An increased level of speculative and pre-lease development is expected to be seen in 2012, although this is likely to remain at a fairly low level until the global economy picks up a head of steam. Overall, investment in commercial property in the Asia-Pacific region came to just under US$93.8 billion in 2011, 10% up on the previous year, according to Real Capital Analytics/Knight Frank data. While increased activity was recorded in China and Australia, volumes in Japan inevitably fell in the aftermath of the TÂŻohoku earthquake. Investment activity in Australia was driven by a notable increase in offshore demand, with cross-border investors accounting for around 50% of office transaction volumes in both Sydney and Melbourne.
2011, to reach 6.2% at the year-end, and rents rose modestly. However, an ample development pipeline may dampen the rate of rental growth in Brisbane during 2012. The lack of available supply is more acute in Perth, with the vacancy rate now standing at 3.3% and nearly all of the new space due for delivery in 2012 already pre-let. Perth now has the highest prime office rents in the country, albeit Sydney still achieves the highest individual rents in trophy, premium buildings. Office rents in Perth are expected to rise further in 2012, with demand supported by the strength of Western Australia’s economy, which is currently outperforming the rest of the nation. Consumer spending was subdued during 2011, contributing to challenging conditions within the Australian retail market. Despite this, a number of international retailers are actively pursuing expansion strategies within the country, with Topshop and Zara being notable new entrants to the market during the last twelve months. Demand from large retailers seeking prime locations for flagship stores has underpinned modest rental growth in Sydney, but rents have remained flat in other locations within the city. Average retail rental growth in Sydney is expected to be flat to negative in 2012.
32
Sydney
Investment volumes slowed in the final quarter of 2011, and the outlook for 2012 appears uncertain. The relative strength of economic growth in the region should continue to encourage activity, but there are signs that aggressive pricing is causing some local investors to look further afield at other international markets in search of better value, with prime office yields at sub-4% in markets such as Tokyo and Hong Kong. The occupational markets of the region face a mixed outlook in 2012, and prime office rents are expected to come under pressure in a number of major cities. Paradoxically, the economic downturn that started in the Eurozone may actually be having a greater impact on some Asian markets, with occupier caution in the historically volatile markets of Hong Kong and Singapore causing these cities to have some of the weakest rental growth prospects globally in 2012.
Table 1
Global CBD office rents, Q4 2011 Market
Region
Hong Kong, SAR China London (West End), UK Tokyo, Japan Moscow, Russia Paris, France Singapore Perth, Australia London (City), UK Geneva, Switzerland Sydney, Australia Lagos, Nigeria St Petersburg, Russia Dubai, UAE Mumbai, India Brisbane, Australia Manhattan, USA Milan, Italy Stockholm, Sweden Beijing, China Delhi NCR, India Melbourne, Australia Oslo, Norway Washington, DC, USA Frankfurt, Germany Abu Dhabi, UAE Rome, Italy Ho Chi Minh City, Vietnam Shanghai, China Aberdeen, UK Istanbul, Turkey Manchester, UK Hanoi, Vietnam Birmingham, UK Doha, Qatar Munich, Germany Bristol, UK Helsinki, Finland Edinburgh, UK Glasgow, UK Boston, USA Miami, USA Amsterdam, Netherlands Riyadh, Saudi Arabia Dublin, Ireland Madrid, Spain Kiev, Ukraine San Francisco, USA Leeds, UK Warsaw, Poland Brussels, Belgium Vienna, Austria Houston, USA Newcastle, UK Los Angeles, USA Cardiff, UK
Asia-Pacific Europe Asia-Pacific Europe Europe Asia-Pacific Asia-Pacific Europe Europe Asia-Pacific Africa Europe Middle East Asia-Pacific Asia-Pacific North America Europe Europe Asia-Pacific Asia-Pacific Asia-Pacific Europe North America Europe Middle East Europe Asia-Pacific Asia-Pacific Europe Europe Europe Asia-Pacific Europe Middle East Europe Europe Europe Europe Europe North America North America Europe Middle East Europe Europe Europe North America Europe Europe Europe Europe North America Europe North America Europe
Rent (€/sq m/yr)
Rent (US$/sq ft/yr)
Rent (UK£/sq ft/yr)
Rank 2010
Rank 2011
Outlook 2012
1,247.58 1,188.16 988.25 926.64 830.00 728.54 718.89 706.48 698.39 686.67 648.65 594.59 566.02 563.49 538.18 534.96 525.00 503.91 465.89 457.38 452.54 450.53 439.54 432.00 420.41 420.00 416.99 408.65 404.62 398.46 378.93 370.66 366.08 362.93 360.00 353.24 348.00 346.82 346.82 344.03 342.87 340.00 339.77 325.00 324.00 320.46 313.78 308.28 307.20 295.00 294.00 288.76 282.59 278.45 269.75
150.09 142.94 118.89 111.48 99.84 87.65 86.49 84.99 84.01 82.61 78.04 71.53 68.10 67.79 64.75 64.36 63.15 60.62 56.05 55.03 54.44 54.20 52.88 51.97 50.58 50.52 50.17 49.16 48.68 47.94 45.59 44.59 44.04 43.66 43.31 42.50 41.86 41.72 41.72 41.39 41.25 40.90 40.88 39.10 38.98 38.55 37.75 37.09 36.95 35.49 35.37 34.74 34.00 33.50 32.45
97.11 92.50 76.93 72.13 64.60 56.71 55.96 55.00 54.36 53.45 50.49 46.28 44.06 43.86 41.89 41.64 40.86 39.22 36.27 35.60 35.23 35.07 34.21 33.63 32.73 32.69 32.46 31.81 31.50 31.02 29.50 28.85 28.50 28.25 28.02 27.50 27.09 27.00 27.00 26.78 26.69 26.46 26.45 25.30 25.22 24.94 24.42 24.00 23.91 22.96 22.88 22.48 22.00 21.67 21.00
3 1 2 4 5 6 N/A 7 11 8 10 17 12 9 14 22 16 20 48 15 23 25 40 26 13 24 19 35 27 29 33 21 31 18 32 34 41 36 37 68 51 39 43 28 38 30 54 44 49 42 47 67 46 58 53
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
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33
2012 GLOBAL REAL ESTATE MARKETS Annual review and outlook
Table 1
Global CBD office rents, Q4 2011 Market
Region
Westchester/Fairfield, USA Vancouver, Canada Long Island, USA New Jersey, USA Berlin, Germany Sheffield, UK Chicago, USA Ottawa, Canada Prague, Czech Republic Manama, Bahrain Copenhagen, Denmark Toronto, Canada Seattle, USA Budapest, Hungary Liverpool, UK Seoul, South Korea San Diego, USA Kuwait City, Kuwait Denver, USA Lisbon, Portugal Montreal, Canada Philadelphia, USA Bucharest, Romania Guangzhou, China Orange County, USA Barcelona, Spain Portland, USA Detroit, USA Lusaka, Zambia Bangkok, Thailand Muscat, Oman Phoenix, USA Baltimore, USA Dar es Salaam, Tanzania Phnom Penh, Cambodia Nashville, USA Kampala, Uganda Dallas, USA Johannesburg, South Africa Bangalore, India Indianapolis, USA St. Louis, USA Atlanta, USA Durban, South Africa Jakarta, Indonesia Kansas City, USA Kuala Lumpur, Malaysia Gaborone, Botswana Cape Town, South Africa Harare, Zimbabwe Nairobi, Kenya Blantyre, Malawi
North America North America North America North America Europe Europe North America North America Europe Middle East Europe North America North America Europe Europe Asia-Pacific North America Middle East North America Europe North America North America Europe Asia-Pacific North America Europe North America North America Africa Asia-Pacific Middle East North America North America Africa Asia-Pacific North America Africa North America Africa Asia-Pacific North America North America North America Africa Asia-Pacific North America Asia-Pacific Africa Africa Africa Africa Africa
Rent (€/sq m/yr)
Rent (US$/sq ft/yr)
Rent (UK£/sq ft/yr)
Rank 2010
Rank 2011
Outlook 2012
262.91 262.57 261.91 258.59 258.00 256.90 255.59 252.52 246.00 245.01 242.14 241.55 241.46 240.00 237.63 236.81 233.40 232.61 224.59 222.00 220.60 218.69 216.00 214.98 214.61 210.00 207.63 195.58 194.59 194.50 191.96 189.01 186.94 185.33 185.33 177.96 171.43 169.98 165.02 164.66 160.17 159.92 158.26 153.64 147.34 145.71 135.61 133.78 129.74 111.20 101.93 96.83
31.63 31.59 31.51 31.11 31.04 30.91 30.75 30.38 29.59 29.48 29.13 29.06 29.05 28.87 28.59 28.49 28.08 27.98 27.02 26.71 26.54 26.31 25.98 25.86 25.82 25.26 24.98 23.53 23.41 23.40 23.09 22.74 22.49 22.30 22.30 21.41 20.62 20.45 19.85 19.81 19.27 19.24 19.04 18.48 17.73 17.53 16.32 16.10 15.61 13.38 12.26 11.65
20.46 20.44 20.39 20.13 20.08 20.00 19.90 19.66 19.15 19.07 18.85 18.80 18.80 18.68 18.50 18.43 18.17 18.11 17.48 17.28 17.17 17.02 16.81 16.73 16.71 16.35 16.16 15.22 15.15 15.14 14.94 14.71 14.55 14.43 14.43 13.85 13.34 13.23 12.85 12.82 12.47 12.45 12.32 11.96 11.47 11.34 10.56 10.41 10.10 8.66 7.93 7.54
71 50 62 73 61 56 74 60 64 78 66 63 57 65 55 77 59 52 82 69 72 75 85 88 76 70 83 92 90 84 87 81 79 89 80 94 99 91 86 97 N/A 93 95 N/A 102 96 101 100 98 105 104 103
56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107
ì î è è ì è î î è è è î è è è î è î ì è î è ì é î î è è ì ì î î è î ì è î è è ì è è è è ì è è î è è ì ì
The figures in this table provide indicative rents for prime, well-located office space. While local practices vary, in order to provide figures that are as comparable as possible, the values quoted represent the rents that could be expected for high specification, standard size office units in the best location within a market.
34
Global Corporate Services
Global Corporate Services
The Newmark Knight Frank Global Corporate Services model combines strategy and execution within a unified team. This integrated platform is crucial to the effective optimisation of clients’ internal corporate real estate functions. Our approach has proven that by developing strategies with a clear understanding of the execution phase, and managing the implementation of those plans from beginning to end, we can achieve optimal results for our clients. Demand of Space.........
Location Strategy and Optimization
OperationsServices Workplace Global Corporate and Portfolio and Strategy
STRATEGY TO IMPLEMENTATION
Facilities and Property Management
Program and Project Management
Workflow Strategy
Real Estate Transactions and Advisory Services
.........Supply of Space
We assign a senior leadership team to every account, providing a truly robust but nimble response to service clients’ needs, and depth and stability in every phase of execution. Our team of worldwide professionals brings crucial local expertise and an in-depth understanding of their respective markets, creating an environment which is conducive to making quick and efficient business decisions. This highly integrated, senior-led organisational structure is based on effective communications and proactive measurement of goals and objectives, ensuring the highest level of quality and consistency for our clients. Looking beyond real estate, the Newmark Knight Frank Global Corporate Services approach takes a holistic view of our clients’ overall objectives, implementing strategies that provide exponential value by reducing costs and thereby increasing profitability. Our approach is founded in the belief that real estate decisions should be made with consideration of long-term goals, and not just as reactive measures driven by lease expirations and other immediate needs.
Tony Nicholas Head of Global Corporate Services – EMEA tony.nicholas@knightfrank.com +44 (0) 20 7861 1179
• Supply Chain/Distribution • Manufacturing • Office and Labs
• 1st Dimension: Targets a specific market (Americas, EMEA, APAC) • 2nd Dimension: Addresses a service requirement (transaction, project, facility) • 3rd Dimension: Leverages subject matter expertise with each asset type Se
rvi
ce s
Subject Matter Expertise
Newmark Knight Frank Global Corporate Services is an integrated global platform which provides seamless, beginning to end corporate services solutions to clients on an international level. Operating from three centres of excellence; New York, London and Hong Kong, Newmark Knight Frank Global Corporate Services oversees operations for all global accounts, ensuring consistent high levels of service for clients worldwide.
G
s hie
rap
g eo
Whatever your business sector, location, corporate structure or company culture, our Newmark Knight Frank Global Corporate Services team is ready to work alongside you, adopting your objectives as our own and designing innovative solutions to bring you closer to your goals. Tony Nicholas, Global Corporate Services, EMEA, said “Business strategies continue to be focused on efficiencies and cost savings, whilst the workplace follows its trend towards activity-based working in response to the arrival of the new generation in the workforce. Occupiers continue to seek consolidation opportunities and flexibility on commitment given the changes in structure and reduced availability of high quality space in a number of prime CBDs. The decision process is still elongated, but the perceived importance of London versus the Eurozone should lead to certainty on strategy in European markets.” Colin Fitzgerald, Global Corporate Services, APAC, said “Demand in key Asian cities such as Hong Kong and Seoul is expected to be dampened by the uncertain global economic outlook especially given that many decisions are made at a European or American HQ. The growth of APAC continues, supported by strong domestic and tourist spending. However, the impact of wage increases on cost operations means that international corporates are beginning to consider whether to onshore manufacturing.” Michael Ippolito, Global Corporate Services, Americas, said “The decision-making process is critical for companies; not only for CRE organisations, but across the board for every business unit. How companies and organisations make decisions plays a key role in successful operational and financial outcomes, from improved productivity to increased profits. Corporates are increasingly realising the importance of technology in this process as a force to align internal data with global real estate strategies to achieve their goals.”
Colin Fitzgerald Managing Director – Hong Kong colin.fitzgerald@hk.knightfrank.com +852 2846 4848
Michael Ippolito Chairman, Global Corporate Services mippolito@newmarkkf.com +1 212 372 2048
35
RESEARCH
Americas USA Canada Caribbean Australasia Australia New Zealand Europe UK Austria Belgium Czech Republic France Germany Hungary Ireland Italy Monaco Poland Portugal Romania Russia Spain Switzerland The Netherlands Ukraine Africa Botswana Kenya Malawi Nigeria South Africa Tanzania Uganda Zambia Zimbabwe
Europe, Middle East and Africa Matthew Colbourne Senior Analyst, International Research +44 (0) 20 7861 1238 matthew.colbourne@knightfrank.com
Asia-Pacific Nicholas Holt Research Manager, Asia-Pacific +65 6228 7313 nicholas.holt@asia.knightfrank.com
Darren Yates Partner, International Research +44 (0) 20 7861 1246 darren.yates@knightfrank.com
The Americas Newmark Knight Frank Research +1 212 372 2000 researchdepartment@newmarkkf.com
Knight Frank Research provides strategic advice, consultancy services and forecasting to a wide range of clients worldwide including developers, investors, funding organisations, corporate institutions and the public sector. All our clients recognise the need for expert independent advice customised to their specific needs.
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