NEW YORK and LONDON, March 6 /PRNewswire-FirstCall/ -- U.S. office buildings may be swimming in high vacancy rates and surprising levels of sub- lease space, but the Moscow office market is tightening and Class A office space in many European capitals remains severely under built.
Like South America in the Western hemisphere, Africa is becoming more attractive to expanding multi-national companies in Europe, and the economic reverberations that began in American markets with the September 11 tragedy have now reached across the Pacific to affect business confidence in Melbourne.
Meanwhile armed with a new membership to the World Trade Organization, China's office markets are on the move again.
These are some of the findings contained in a Global Real Estate Forecast released this week by global business advisors Grubb & Ellis and its London- based global initiative partner, Knight Frank. The joint market forecast (available online at http://www.grubb-ellis.com/marketintelligence/GlobalBook.pdf) follows on the heels of a detailed look by all 52 Grubb & Ellis offices and affiliates at the real estate prospects for key American markets.
Although the report warns that rapidly shifting global real estate markets will create tougher decisions for companies looking to expand operations overseas, Grubb & Ellis CEO Barry Barovick is advising all American companies to look past the current down market. "Our research is telling us the same as many resources here in the U.S.: the economy is already showing signs of getting back to normal," said Barovick. "I'm afraid many companies are not forward planning for their real estate needs, and those companies are going to pay a steep price both here and abroad as space begins to tighten and investment property prices rise." Barovick added that as one of the top cost centers for any company, real estate strategic planning on a corporate level is finally getting more respect as an issue tackled in many board rooms across the country, and the world.
John Martin, Senior Partner of Knight Frank, the UK-based property consultancy, agrees, adding that the two firms feel this global forecast initiative is an important exercise because "having a global presence is not just an option for many companies, it's a requirement." That need, he says, is also requiring study of more than just rental figures. "We think it's imperative that our clients have more and better market intelligence from a world market perspective."
The new global market intelligence report also tends to look at American markets in the context of world business movements. "Many American business people don't understand the national, regional, and in some cases, the local impact of events like the adoption of the Euro, or the World Trade Organization's new Chinese membership. That includes people in our own industry as well," said Barovick.
With European markets likely to remain resilient to the U.S. recession, investment in commercial property is likely to remain vigorous. New office development is actually increasing, especially in markets suffering from scarcity of space options. The report points to Frankfurt, Paris, Lisbon and Barcelona as particularly attractive investment markets.
To download a copy of the 2002 Global Real Estate Forecast, 2002 U.S. local market forecasts, or data on Global Office Occupancy Costs from Grubb & Ellis and Knight Frank, visit http://www.grubb-ellis.com/marketintelligence .
Grubb & Ellis:
Grubb & Ellis (NYSE: GBE) is a business advisory firm with global expertise in real estate. As one of the leading providers of multi-level solutions for businesses and corporations worldwide, Grubb & Ellis delivers strategic planning, property and asset management services, and transaction expertise in both corporate and investment real estate. With the collective resources of more than 8,000 people in over 200 offices in 29 countries, including its affiliates and a strategic initiative with Knight Frank, one of the leading property consulting firms in Europe, Africa and Asia Pacific, Grubb & Ellis provides a single point of contact for clients addressing commercial real estate issues seamlessly. For more information, visit the company's website at www.grubb-ellis.com .
GLOBAL OFFICE OCCUPANCY COSTS
4th Q 2001 v. 4th Q 2000
RANK RANK RENT (US$) RENT (US$) %
4Q 2001 4Q 2000 MARKET REGION 4Q 2000 4Q 2001 CHANGE
1 1 London Europe $151.55 $149.04 -1.7%
2 2 Tokyo Asia $112.02 $107.20 -4.3%
3 6 Paris Europe $69.50 $69.31 -0.3%
4 7 Hong Kong Asia $69.19 $69.00 -0.3%
5 5 Zurich Europe $70.18 $64.79 -7.7%
6 9 Moscow Europe $61.04 $62.89 3.0%
7 8 New York United
States $64.52 $59.16 -8.3%
8 11 Frankfurt Europe $55.60 $57.92 4.2%
9 13 Geneva Europe $52.91 $53.09 0.4%
10 12 Dublin Europe $54.87 $52.18 -4.9%
11 10 Stockholm Europe $60.54 $46.51 -23.2%
12 3 San Jose United
States $83.64 $45.31 -45.8%
13 17 Madrid Europe $41.42 $45.23 9.2%
14 14 Sydney Asia $45.11 $41.67 -7.6%
15 21 Milan Europe $34.51 $38.97 12.9%
16 4 San Francisco United
States $77.50 $37.71 -51.3%
17 18 Warsaw Europe $37.35 $37.35 0.0%
18 22 Fairfield United
County States $34.33 $37.30 8.7%
19 25 Shanghai Asia $32.71 $36.42 11.3%
20 26 Amsterdam Europe $32.37 $35.52 9.8%
21 15 Boston United
States $45.00 $34.50 -23.3%
22 16 Oakland United
States $43.18 $33.76 -21.8%
23 20 Berlin Europe $35.43 $33.67 -5.0%
24 23 Washington, United
DC States $33.20 $32.47 -2.2%
25 24 Chicago United
States $32.94 $32.31 -1.9%
26 30 Westchester United
County States $29.26 $31.54 7.8%
27 19 Seattle United
States $36.45 $31.32 -14.1%
28 28 Los Angeles United
States $29.72 $30.56 2.8%
29 29 New Jersey United
No. & Central States $29.72 $30.10 1.3%
30 32 San Diego United
States $28.39 $30.00 5.7%
31 33 Miami-Dade United
States $28.00 $29.22 4.4%
32 31 Barcelona Europe $28.59 $28.31 -1.0%
33 37 Long Island United
States $27.23 $27.00 -0.8%
34 36 Palm Beach United
County States $27.31 $26.86 -1.6%
35 39 Minneapolis United
States $26.73 $26.85 0.4%
36 34 Detroit United
States $27.76 $26.62 -4.1%
37 27 Orange County United
States $31.44 $26.52 -15.6%
38 48 Philadelphia United
States $24.24 $26.51 9.4%
39 38 Brussels Europe $26.97 $25.76 -4.5%
40 35 Melbourne Asia $27.43 $25.39 -7.4%
41 46 Austin United
States $24.83 $24.95 0.5%
42 42 Lisbon Europe $25.41 $24.94 -1.8%
43 53 Houston United
States $23.46 $24.60 4.9%
44 41 Vienna Europe $25.64 $24.25 -5.4%
45 51 Cleveland United
States $23.65 $24.06 1.7%
46 44 Atlanta United
States $25.12 $23.92 -4.8%
47 49 Portland United
States $23.85 $23.86 0.0%
48 47 Broward United
County States $24.61 $23.76 -3.5%
49 43 Sacramento United
States $25.40 $23.71 -6.7%
50 45 Prague Europe $24.95 $23.65 -5.2%
51 52 Dallas United
States $23.52 $23.58 0.3%
52 50 Phoenix United
States $23.79 $23.20 -2.5%
53 56 Orlando United
States $22.27 $22.53 1.2%
54 40 Denver United
States $25.72 $22.52 -12.4%
55 54 Pittsburgh United
States $22.93 $22.36 -2.5%
56 59 San Antonio United
States $20.33 $21.34 5.0%
57 58 Tampa United
States $21.56 $21.30 -1.2%
58 55 Budapest Europe $22.82 $20.22 -11.4%
59 60 Riverside-San United
Bern States $18.49 $19.98 8.1%
60 57 Kuala Lumpur Asia $21.71 $19.75 -9.0%
61 61 Jakarta Asia $18.45 $14.82 -19.7%
http://www.grubb-ellis.com/marketintelligence/GlobalOfficeOccupancyCosts.pdf
Source: Grubb & Ellis/Knight Frank
