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Office Space Across The World 2011

Feb 25, 2011
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C U S H M A N & WA K E F I E L D R E S E A R C H

OF FIC E S PACE AC RO S S THE WOR LD

2 011

GLOBAL OFFICE MARKET REPORT

Cushman & Wakefield is committed to providing the highest quality of service to its business space clients through the continuous monitoring of office and industrial trends and practices. This edition of Office Space Across the World provides a detailed analysis of prime office property rental performance and occupancy costs across the globe in the twelve months to December 2010. The information and data provided in this report are based on a comprehensive survey of Cushman & Wakefield's international offices and the editors are extremely grateful to them for their time, effort and assistance. Our international representation is designed to facilitate the rapid flow of information across borders and is supported by a comprehensive database of market information and regular liaison meetings. This allows for the exchange of local market knowledge and expertise and for the co-ordination of strategy for international investment and locational decision-making. Information on the markets has been provided by Cushman & Wakefield and its alliance offices listed in the table below: AUSTRIA BULGARIA DENMARK GREECE IRELAND ISRAEL KAZAKHSTAN LEBANON LUXEMBOURG MALAYSIA NEW ZEALAND NORWAY PHILIPPINES SOUTH AFRICA SWITZERLAND TAIWAN THAILAND
Inter-pool/FaciCon Forton International RED - Property Advisers Proprius SA Lisney Inter Israel Real Estate Agency Ltd Veritas Brown Michael Dunn & Co S.A.L Property Partners S.A YY Property Solutions Bayleys Realty Group Ltd Malling & Co Cuervo Far East, Inc. Pace Property Group (PTY) Ltd SPG Intercity REPro International Inc. Nexus Property Consultants Ltd

GLOBAL PROPERTY OVERVIEW MOST EXPENSIVE LOCATIONS COUNTRY SUMMARIES
Americas Argentina Brazil Canada Chile Ecuador Mexico Peru USA Venezuela Australia China Hong Kong India Indonesia Japan Malaysia New Zealand Philippines Singapore South Korea Taiwan Thailand Vietnam 9 9 9 9 9 9 9 9 9 10 10 10 10 10 10 10 10 10 11 11 11 11 11 11 11 11 11 12 12 12 12 12 12 12 12 12 13 13 13 13 13 13 13 13 13 14 14 14 14 14 14 14 14 14 15 15 15 15 15 15 15 15 15 16 16 16 16 16

2 7

Asia

Europe

Austria Belgium Bulgaria Croatia Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Kazakhstan Latvia Lithuania Luxembourg Netherlands Norway Poland Portugal Romania Russia Serbia Slovakia Slovenia Spain Sweden Switzerland Turkey Ukraine UK Africa & The Middle East Bahrain Egypt Israel Kuwait Jordan Lebanon Oman Qatar Saudi Arabia South Africa Syria UAE

RESEARCH SERVICES RESEARCH PUBLICATIONS

17 18

1

SUMMARY AND OUTLOOK

Rental Change Per Year

Against a backdrop of improving economic performance across the world, the global office market started to recover from one of the quickest and most severe downturns recorded. 2010 witnessed a pick up in demand across most markets which, along with a dearth of new construction activity, pushed down levels of supply. Global office market rents increased marginally by 1%, with rents in all regions bar the Middle East and Africa moving back into positive territory over the year. Once again South America showed the best performance in terms of rents, recording rental growth of 12% in stark contrast to North America where rents were stable. The Brazilian economy enjoyed one of the quickest and strongest recoveries in the world after the recession and this was reflected in its real estate market with rents rapidly rising. After recording the steepest rental declines in 2009, Asia Pacific saw a sharp bounce-back in values and recorded one of the best performances in terms of regional rental growth, with rents increasing on average by 9%. The overall increase in rents was mainly driven by a sharp rise in a number of key markets in the region, most notably Hong Kong. The pattern across Europe was one of rental stability, although growth was just about positive year on year. Recovery in rental values was led by London, where a sharp uplift in rents was evident in 2010. Letting activity was at a 10 year high, fuelled by a number of pre-lets, whilst supply of good quality space diminished. Africa & the Middle East was the only region to see a continuing decline in rental values during 2010, with an average decrease of 10% recorded. This was primarily due to significant falls in rents in Oman, Bahrain and the UAE. Manama and Muscat saw the greatest decline in rents at 33% and 27% respectively, while rents in both Dubai and Abu Dhabi also fell markedly, recording rental declines of more than 20% over the year. This varying speed of rental increases around the world resulted in some movement in terms of the relative cost of occupying office space in cities across the world. Hong Kong moved back into first position, up from third, swapping places with Tokyo, whilst London's West End remained the second most expensive location to occupy office space. The difference in occupancy costs between Hong Kong and London West End is minimal but there is now a considerable differential between these two cities and Tokyo. Looking forward, as with 2010, future economic growth rates will vary, not only from region to region but also country to country. As such the pace of recovery in the office market should follow that of the overall economy and most markets will see steadily improving levels of activity. In most cases a rapid expansion in demand is not anticipated although prospects for employment growth will slowly pick up. What is more, the potential shortage of good quality space is a significant driver in many markets and coupled with the prospects of an uplift in rents, this may spur some occupiers into acting sooner rather than later. It is anticipated that rents will remain on a steady upward trajectory, before seeing stronger growth into 2012 and 2013.

GLOBAL: ANNUAL RENTAL GROWTH OVER FIVE YEARS
20%

15%

10%

5%

0%

-5%

-10%

-15% 2006
Source: Cushman & Wakefield, February 2011

2007

2008

2009

2010

GLOBAL: CITIES WITH LARGEST RENTAL GROWTH 2010
Prime Rent 2000 Annual Rental Growth 60%

1500

45%

1000

30%

500

15%

0

0%

Rio de Janeiro CBD

Hong Kong CBD

Ho Chi Minh City CBD

Source: Cushman & Wakefield, February 2011

GLOBAL RENTAL PERFORMANCE IN THE YEAR TO DECEMBER 2010 Country Rental Performance (% of Countries Showing)
Growth Fall Stable

Average Rent /sq. m./Year Average Rental Change % Change

353

1%

Source: Cushman & Wakefield, February 2011

London West End

Shanghai CBD

Astana CBD

Almaty CBD

London City

Beijing CBD

Lima CBD

Rental Growth Per Year

Sq.m. Per Year

2

AMERICAS OVERVIEW

There was an improvement in rental performance within the Americas region in 2010. However this was primarily as a result of significant rental growth seen in South America over the year, with Brazil in particular witnessing a rise in rental values of over 25% in 2010. As a result two of the three most expensive locations within the Americas region were from Brazil. There was a notable polarisation between North and South America in terms of rental performance over the year. North America saw rents move up by 1%, as occupier demand remained sluggish across the majority of locations. In contrast, rental growth in South America amounted to 12%, which was the highest sub regional rise in rents recorded across the globe. As a result of the significant growth in rents seen in 2010, the most expensive location in the region was Rio de Janeiro. This is the first time that a South American location has been the most expensive within the wider Americas region. Rental levels in Rio de Janeiro rose by almost 47% over the year and the city moved above New York (Midtown) as the most expensive location within the wider region. The Brazilian economy continued to grow apace in 2010 and, as a result, occupier demand in the major Brazilian cities has rose further. Moreover, both Chile and Venezuela saw a steady rise in rents over the year, moving up by 8% and 13% respectively. The only South American location to see rental values fall in 2010 was Argentina where rents eased down by 3% over the year. The primary Buenos Aires market was subdued as tenants were focused on consolidation and lease renewal rather than expansion plans. Rental growth in North America was much more subdued than in South America, with Canada experiencing a 1% rise and the USA seeing a slight decline of 2% over the year. Most cities within the USA saw rents continue to fall over the year as occupier sentiment remained largely subdued. However rents in the prime Midtown New York submarket rose by 10%, as the city emerged from the recession faster than the rest of the nation. As a result, demand recovered sufficiently to push rental values upwards over the year. In Canada, market activity remained focussed upon city centre locations, although demand levels held firm rather than exhibiting notable growth over the year. However in terms of nationwide rental growth, Vancouver was the tightest market in 2010 and consequently rents moved up by 7% over the year. The Mexican market was also relatively subdued as the economy takes time to recover from the recent recession. Rents in Mexico City eased up by 4% in 2010, with the outlook for 2011 looking more positive with growth expected to be slow but steady.
Rental Change Per Year

AMERICAS: ANNUAL RENTAL GROWTH OVER FIVE YEARS
20%

15%

10%

5%

0%

-5%

-10% 2006 2007 2008 2009 2010
Source: Cushman & Wakefield, February 2011

AMERICAS: CITIES WITH LARGEST RENTAL GROWTH 2010
Cost Annual Rental Growth 50%

£1000

£800

40%

Sq.m. Per Year

£600

30%

£400

20%

£200

10%

£0

0%

New York Midtown

Philadelphia CBD

Vancouver CBD

São Paulo CBD

Lima CBD

Rio de Janeiro CBD

Santiago Las Condes

Mexico City CBD

Caracas CBD

Source: Cushman & Wakefield, February 2011

AMERICAS RENTAL PERFORMANCE IN THE YEAR TO DECEMBER 2010 Country Rental Performance (% of Countries Showing)
Growth Fall

Average Rent /sq. m./Year Average Rental Change % Change

347

3%

Source: Cushman & Wakefield, February 2011

3

Toronto CBD

Rental Growth Per Year

ASIA OVERVIEW

Reversing the dramatic fall in rents seen in early 2009, the Asian region witnessed 9% rental growth over the last year. As a result of strong economic growth holding up over the year, the region rebounded rapidly in 2010 and has been the driving force behind global rental growth. The region held its position at the top of the global ranking for occupancy costs with two of the top three most expensive locations in the world located in Asia. Hong Kong overtook Tokyo and London to become the most expensive location, while Tokyo slipped two places to third. Rental values in Mumbai CBD held firm over the year and was placed sixth in the occupancy cost ranking, rounding out the top three most expensive locations in the region. However, prime rents in Hong Kong are twice as high as those in Mumbai, indicating the recent rise in rental values and the scale of rents in the Hong Kong market Rental levels in Hong Kong soared by 51% over the year. Occupier demand levels were robust throughout 2010, with more corporate expansions and new firms setting up operations. Strong demand and limited availability of Grade A office space were the major drivers for rental appreciation. This was a similar situation to that seen in the Beijing office market, where rental rates exceeded their peak in 2008 and grew at a rate of 48% over the year. The surge in rental rates was largely underpinned by the lowest vacancy rate seen in the last decade and increasing occupier demand. Many of India's corporate expansion plans that were put on hold as a result of the financial crisis were executed in the first half of 2010, resulting in a healthy revival of the office market nationwide. While rental values held firm in Mumbai, Bangalore witnessed growth of 13% over the year due to strong demand ahead of supply. 2010 was a year of significant turnaround for Singapore's office market and rental levels grew by 16%. Rental growth was fuelled by the rapid expansion of multi-national companies coupled with an improved business outlook and limited new supply of Grade A space. In contrast to the prevailing regional trend, rents in Tokyo fell by 11% over the year. However Tokyo remained the third most expensive location in the world. The office market was marked by very limited letting activity and most occupiers focussed on lease renewal negotiations rather than relocation. In fact, Tokyo remained a tenants market in 2010, with vacancy rates rising and average rental levels decreasing.

ASIA: ANNUAL RENTAL GROWTH OVER FIVE YEARS
30%

20%

Rental Change Per Year

10%

0%

-10%

-20% 2006 2007 2008 2009 2010

Source: Cushman & Wakefield, February 2011

ASIA: CITIES WITH LARGEST RENTAL GROWTH 2010
Cost £2000 Annual Rental Growth 60%

£1500

45%

£1000

30%

£500

15%

£0

0%

Hong Kong CBD

Ho Chi Minh City CBD

Singapore CBD

Bangalore CBD

Shanghai CBD

Beijing CBD

Astana CBD

Almaty CBD

Source: Cushman & Wakefield, February 2011

ASIA RENTAL PERFORMANCE IN THE YEAR TO DECEMBER 2010 Country Rental Performance (% of Countries Showing)
Growth Fall

Average Rent /sq. m./Year Average Rental Change % Change

441

9%

Source: Cushman & Wakefield, February 2011

Manila Ortigas

Pune CBD

Rental Growth Per Year

Sq.m. Per Year

4

EUROPE, THE MIDDLE EAST & AFRICA (EMEA) OVERVIEW

In 2010 there was a marked difference in rental performance between locations in Europe and those in the Middle East and Africa. Rents across Europe moved up by 1% as a slow economic recovery gathered pace in some parts of the region, with a number of locations witnessing notable rental growth. In contrast, the Middle East and Africa experienced a difficult year in terms of rental growth, as values fell across much of the region. Despite a notable recovery in some locations, the rental performance picture within Europe was very mixed, with a similar number of countries showed rental growth, a fall in rents or no change in rents over the year. Despite this variety in performance across the region, the overall European rental performance barely changed over the year. Although the picture across Europe was largely stable, there were specific locations that recorded strong rental growth. The most significant growth was seen in the UK, most notably in Central London, where rents in the City grew by 25% over the year and those in the West End moved up by 27%. Other large Western European countries to see a recovery in rents were France and Italy where the recovery was led by rents in Paris (CBD) moving up by 9% and Milan by 10% over the year. However prevailing economic difficulties witnessed in some Western European markets was also reflected in a very cautious occupational market and a further decline in rental values. For example, rents in Ireland, Spain and Greece fell by 19%, 7% and 3% respectively over the year. In Central and Eastern Europe (CEE) both Bulgaria and Romania saw still weak demand and an excess of supply and consequently rental values fell by 9% and 5% in 2010. However across the CEE region rental values were largely unchanged, with positive rental growth seen in Russia, Lithuania and Ukraine helping to balance the reductions seen elsewhere. In the Middle East and Africa rental levels across the region fell by 10%, as many locations continued to experience excessive levels of supply as developments started before the crisis were completed. This will rise further in 2011, but in some areas demand should also improve, as tenants look to take advantage of their power in the market to upgrade or renegotiate. In terms of rental growth, 2010 saw a further decline from the levels seen in 2009. Abu Dhabi and Dubai both saw rents move down by over 20%, as significant oversupply characterised the major office markets within the United Arab Emirates (UAE). Both Manama in Bahrain and Muscat in Oman also witnessed a significant easing in rents during 2010. Furthermore, after being responsible for the majority of rental growth seen in the region in the previous year, rents in South Africa fell by 10% across the country. However, indicators for 2011 are more positive, therefore rents are anticipated to begin to stabilise over the year.
Rental Change Per Year

EMEA: ANNUAL RENTAL GROWTH OVER FIVE YEARS
15%

10%

5%

0%

-5%

-10% 2006 2007 2008 2009 2010

Source: Cushman & Wakefield, February 2011

EMEA: CITIES WITH LARGEST RENTAL GROWTH 2010
Cost £1200 Annual Rental Growth 60%

£900

45%

£600

30%

£300

15%

£0

0%

London West End

Warsaw CBD

Source: Cushman & Wakefield, February 2011

EMEA RENTAL PERFORMANCE IN THE YEAR TO DECEMBER 2010 Country Rental Performance (% of Countries Showing)
Growth Fall Stable

Average Rent /sq. m./Year Average Rental Change % Change

325

-2%

Source: Cushman & Wakefield, February 2011

5

Stockholm Birger Jarlsgatan

Glasgow CBD

Tel Aviv CBD

Luxembourg City CBD

London City

Vilnius CBD

Milan CBD

Paris CBD

Rental Growth Per Year

Sq.m. Per Year

MOST EXPENSIVE LOCATIONS IN EACH COUNTRY

Hong Kong London Tokyo Rio de Janeiro New York Mumbai Moscow Paris Zurich Milan Singapore Shanghai Luxembourg City Stockholm Sydney Abu Dhabi Doha Oslo Taipei Almaty Amsterdam Madrid Frankfurt Ho Chi Minh City Athens Dublin Warsaw Beirut Tel Aviv Brussels Vancouver Istanbul Caracas Vienna Seoul Copenhagen Kuala Lumpur Prague Auckland Budapest Damascus Helsinki Bucharest Buenos Aires Mexico City Manama Riyadh Kyiv Lisbon Bratislava Kuwait City Bangkok Santiago Cairo Vilnius Manila Zagreb Belgrade Ljubljana Tallinn Amman Jakarta Riga Lima Sofia Muscat Sandton Quito 0 500 1000 Occupancy Cost Per sq. m. Per Year

Other Costs

Rent

1500

2000

Other costs relate to property taxes and service charges, all occupancy costs are converted to a Net Internal Area Source: Cushman & Wakefield

6

CBD LOCATION RANKING

CBD LOCATION RANKING
Country Rank
2010
3 2 1 13 6 5 7 8 10 9 24 26 11 16 15 4 12 20 36 n/a 23 19 21 46 18 17 30 31 38 25 34 33 n/a 28 14 29 37 27 43 35 32 44 39 42 48 22 41 50 40 47 49 56 52 45 60 59 51 54 n/a 62 58 53 61 63 55 n/a 57 64

Country
2011
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 56 57 58 59 60 61 62 63 64 65 66 67 68 China UK Japan Brazil USA India Russia France Switzerland Italy Singapore China Luxembourg Sweden Australia UAE Qatar Norway Taiwan Kazakhstan Netherlands Spain Germany Vietnam Greece Ireland Poland Lebanon Israel Belgium Canada Turkey Venezuela Austria South Korea Denmark Malaysia Czech Republic New Zealand Hungary Syria Finland Romania Argentina Mexico Bahrain Saudi Arabia Ukraine Portugal Slovakia Kuwait Thailand Chile Egypt Lithuania Philippines Croatia Serbia Slovenia Estonia Jordan Indonesia Latvia Peru Bulgaria Oman South Africa Ecuador

City
Hong Kong London Tokyo Rio de Janeiro New York Mumbai Moscow Paris Zurich Milan Singapore Shanghai Luxembourg City Stockholm Sydney Abu Dhabi Doha Oslo Taipei Almaty Amsterdam Madrid Frankfurt Ho Chi Minh City Athens Dublin Warsaw Beirut Tel Aviv Brussels Vancouver Istanbul Caracas Vienna Seoul Copenhagen Kuala Lumpur Prague Auckland Budapest Damascus Helsinki Bucharest Buenos Aires Mexico City Manama Riyadh Kyiv Lisbon Bratislava Kuwait City Bangkok Santiago Cairo Vilnius Manila Zagreb Belgrade Ljubljana Tallinn Amman Jakarta Riga Lima Sofia Muscat Sandton Quito

Location
CBD West End CBD CBD Midtown CBD CBD CBD CBD CBD CBD CBD CBD Birger Jarlsgatan CBD CBD CBD CBD CBD (Xinyi Planned Area) CBD Zuidas CBD CBD CBD Syntagma Square CBD (2/4 Districts) CBD CBD CBD Quartier Leopold CBD European Side (Levent) CBD CBD CBD Harbour Area CBD CBD CBD Pest (CBD) CBD CBD CBD CBD CBD CBD CBD CBD Av da Liberdade CBD CBD CBD Las Condes CBD CBD Makati CBD CBD CBD CBD CBD CBD CBD CBD CBD CBD CBD CBD

Occupancy Cost
/sq. m./Year
1931 1872 1334 965 920 916 868 835 786 729 673 653 649 633 623 583 565 551 545 528 507 506 498 496 489 448 431 427 426 410 410 405 403 400 395 381 375 361 361 360 358 338 332 331 320 320 320 318 311 304 286 281 271 268 254 241 234 230 227 219 214 214 205 188 187 186 171 137

7

NON CBD LOCATION RANKING

NON CBD LOCATION RANKING
Country
2011
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 UK Brazil France Switzerland Netherlands Russia Singapore Norway Israel Australia India Austria USA Spain Sweden Italy Belgium Canada Argentina Denmark Greece Ireland Mexico Vietnam Poland Lithuania Romania Portugal Slovakia Indonesia Thailand New Zealand Czech Republic Finland Germany South Korea Taiwan Estonia South Africa Hungary Malaysia Latvia Bulgaria London Rio de Janeiro Paris Geneva Amsterdam Moscow Singapore Oslo Tel Aviv Brisbane Mumbai Vienna Los Angeles Madrid Stockholm Milan Brussels Calgary Buenos Aires Copenhagen Athens Dublin Mexico City Hanoi Warsaw Vilnius Bucharest Lisbon Bratislava Jakarta Bangkok Auckland Prague Helsinki Frankfurt Seoul Taipei Tallinn Johannesburg Budapest Kuala Lumpur Riga Sofia Decentralised (Hammersmith) Barra da Tijuca (Non CBD) South West Suburbs Out of Town Out of Town (Schiphol Airport) Out of Town Suburban Oslo West Herzliya CBD Fringe Andheri-Kurla Donau City Non CBD Out of Town Decentralised Decentralised Decentralised Suburban Non CBD Ørestaden Out of Town Suburban Suburban My Dinh Non Central Locations Non CBD Decentralised Decentralised Non CBD Non CBD Non CBD Non CBD Outer City Out of Town Decentralised Bundang Neihu Non CBD Centurion Periphery Non CBD Non CBD Non CBD

City

Location

Occupancy Cost
/sq. m./Year
716 591 565 470 468 465 428 407 387 386 385 378 328 327 313 308 284 279 268 257 252 244 237 236 226 226 219 219 212 210 208 200 198 194 192 192 181 170 160 155 150 142 131

N.B. The Non CBD zone is a distinct office submarket, principally serving corporate rather than local users but may be complementary or competing with the CBD itself. It is not necessarily abutting the principal CBD, however it is located within the immediate sphere of influence of the city.

8

COUNTRY SUMMARIES

City Country Overview
AMERICAS Argentina · · Rental levels edged down over the year, as occupier demand weakened. The Buenos Aires office market is expected to remain less active in 2011, as occupiers may postpone expansion and investment decisions. Buenos Aires CBD

Rents Quoted In

Rent

Annual Rental Growth %
-3%

NET INTERNAL AREA Rent US$/sq.ft/yr Rent /sq.m/yr

Rental Trend 2011

US$ per sq.m per month

30.00

33.45

268.34



Brazil · The Brazilian office market was positive over the year with vacancy rates decreasing to just under 8% and net absorption 70% higher then in 2009. Construction activity remains heated in Rio de Janeiro, and boosted by higher expected demand in 2011, rents should continue to move upwards. São Paulo CBD Reals per sq.m per month 85.03 4% 67.38 540.65

·

Rio de Janeiro CBD

Reals per sq.m per month

133.25

47%

105.60

847.25



Canada · The primary office markets in Canada witnessed resilient demand, with Toronto seeing the greatest positive shift in business sentiment whilst Calgary experienced a resurgence in occupier activity over the year. Positive demand for office space will continue in 2011, generating some upward pressure on rental rates in those markets where momentum is already strong. Toronto CBD Montreal CBD C$ per sq.ft per year C$ per sq.ft per year 20.54 19.83 3% 1% 20.67 19.96 165.86 160.13

·

Calgary CBD Vancouver CBD Ottawa CBD

C$ per sq.ft per year C$ per sq.ft per year C$ per sq.ft per year US$ per sq.m per month

28.67 33.54 25.36 26.65

-3% 7% 3% 8%

28.85 33.75 25.52 29.71

231.51 270.83 204.78 238.37



Chile · Significant increases in occupier demand resulted in rents increasing by 8% for Grade A space in 2010. With rents anticipated to continue rising in 2011, new developments are expected to focus upon Class A buildings in the principal submarket, Las Condes. Santiago Las Condes

·

Ecuador · · Mexico · Slow paced growth in external demand and a gradual economic recovery over the year saw rents ease up by 4%. As the Mexican economy slowly improves, demand in the office market is expected to grow leading to a slow but steady decline in vacancy and stable rental values. Mexico City CBD US$ per sq.m per month 28.33 4% 31.58 253.40 Rental values increased marginally over the year due to the low level of available stock in the Quito market. Rents are anticipated to continue to grow in 2011, as increases in occupational demand are expected. Quito CBD US$ per sq.m per month 13.37 1% 14.91 119.59

·

Peru · In 2010, Grade A office space rents have seen an increase of 17% across Lima, with a rise in occupier demand forcing rents upwards. The continued scarcity of Grade A space in Lima should ensure continuing pressure on rental values throughout 2011. Lima CBD US$ per sq.m per month 17.50 17% 19.51 156.53

·

United States · Rental levels across the USA decreased with Washington fairing the worst as a result of weak occupier demand and increases in supply levels. Atlanta CBD Boston CBD Chicago CBD Houston CBD · Signs of stability are now emerging, however, with the prime Midtown submarket in New York City moving out of recession faster than the rest of the country with rents in the Midtown submarket increasing by 10% due to improved market conditions. Los Angeles West Miami CBD New York Downtown New York Midtown Philadelphia CBD San Francisco CBD Portland CBD Washington CBD Venezuela · · Prime office rents moved up in 2010, increasing by 13% due to growing occupier demand. Despite new projects being released onto the market, prime rents are expected to grow by 20-30% in 2011 as a result of further significant tenant demand. Caracas CBD US$ per sq.m per month 45.00 13% 50.17 402.50 US$ per sq.ft per year US$ per sq.ft per year US$ per sq.ft per year US$ per sq.ft per year US$ per sq.ft per year US$ per sq.ft per year US$ per sq.ft per year US$ per sq.ft per year US$ per sq.ft per year US$ per sq.ft per year US$ per sq.ft per year US$ per sq.ft per year 20.23 44.21 37.32 36.63 40.56 43.62 44.52 97.18 27.57 39.02 25.17 51.69 -3% -3% -3% -9% -7% -7% -3% 10% 5% 2% -2% -10% 23.87 52.17 44.04 43.22 47.86 51.47 52.53 114.67 32.53 46.04 29.70 60.99 191.52 418.55 353.32 346.79 384.00 412.97 421.49 920.04 261.02 369.42 238.29 489.37

9

COUNTRY SUMMARIES

City Country Overview
ASIA Australia · Australia experienced growth in both Brisbane and Melbourne last year, while Sydney lagged in comparison. Sydney CBD Melbourne CBD · Underlined again by strength in Brisbane and Melbourne, the wider office market will continue to improve with rents expected to slowly rise further. Brisbane Centre

Rents Quoted In

Rent

Annual Rental Growth %
-1% 6% 4%

NET INTERNAL AREA Rent US$/sq.ft/yr Rent /sq.m/yr

Rental Trend 2011

A$ per sq.m per year A$ per sq.m per year A$ per sq.m per year

650.00 425.00 615.00

61.90 40.47 58.56

496.64 324.72 469.90



China · Take-up of Grade A space surged in 2010 due to a recovery in business confidence and increasing domestic demand for high-quality space. Beijing is increasingly becoming a landlords market due to large absorption levels and limited supply. Office rents increased by 48% in 2010 and the vacancy rate decreased to 7%. Beijing CBD CNY per sq.m per month 394.18 48% 66.69 536.30

·

Shanghai CBD

CNY per sq.m per month

435.75

28%

73.72

592.86



Hong Kong · The office market in 2010 was very robust with a low availability rate of 5% and significant demand for Grade A space contributing to increase rental levels by 51% over the year. The outlook for 2011 is of a still very active market due to the limited supply of office space and vigorous demand pushing up Grade A office rents by an estimated 15-20%. Hong Kong CBD HK$ per sq.ft per month 139.40 51% 215.19 1726.55

·

India · India experienced a healthy revival in its occupier market with a 23% increase in absorption across the country and rents appreciating by 5% over the last year. Mumbai remains the most expensive location within India, despite rents holding firm over the year. Bangalore saw the largest rise in rents in 2010, moving up by 13%. Mumbai CBD New Delhi CBD Bangalore CBD Chennai CBD Hyderabad CBD Pune CBD Kolkata CBD Jakarta CBD INR per sq.ft per month INR per sq.ft per month INR per sq.ft per month INR per sq.ft per month INR per sq.ft per month INR per sq.ft per month INR per sq.ft per month US$ per sq.m per month 300.00 250.00 80.00 60.00 47.00 60.00 103.00 23.87 0% 3% 13% 9% -6% 9% 5% 0% 99.83 83.19 26.62 19.97 15.64 19.97 34.28 26.61 801.00 667.50 213.60 160.20 125.49 160.20 275.01 213.51

·

Indonesia · Demand for CBD office space in Jakarta advanced over the year as the country recovers from the market downturn in 2009. Business confidence will continue to rise for at least the first half of 2011, but more new supply will enter the market towards the end of the year.

·

Japan · The Tokyo office market remained a tenants market in 2010, with the vacancy rate increasing throughout the year and rental levels decreasing. Prime rents are expected to continue declining, although more gradually throughout 2011, while the average vacancy rate is anticipated to increase. Tokyo CBD Yen per tsubo per month 40,000.00 -11% 166.32 1334.48

·

Malaysia · Office market rents moved down in 2010 with occupiers seeking opportunities to move to newer, better quality buildings at attractive rental rates and tenancy terms. An increase in demand is expected in 2011 but occupancy rates are likely to fall due to ample supply coming onto the market while rents are expected to ease down. Kuala Lumpur CBD RM per sq.ft per month 12.00 -8% 46.70 374.70

·

New Zealand · In New Zealand, vacancy rates increased as new space entered the market while leasing activity was more subdued resulting in downward pressure on effective rents. Major markets like Auckland and Wellington will see some long term projects reach completion in 2011 adding further pressure on to existing stock. Auckland CBD NZ$ per sq.m per month 40.00 -7% 34.84 279.51

·

Philippines · · With low leasing rates and high vacancy, 2010 was favourable for tenants in the Manila Makati submarket. Rental values moved up in 2010 and 2011 is expected to be characterised by gradually increasing lease rates due to higher demand and restrictions on supply. Manila Makati Manila Ortigas PhP per sq.m per month PhP per sq.m per month 850.00 450.00 0% 13% 25.52 13.51 204.79 108.42

10

COUNTRY SUMMARIES

City Country Overview
ASIA Singapore · The Singapore office market recovered in 2010 with prime rents moving up by 16%, as occupier demand rose significantly. With demand expected to increase further and additional corporate expansions, prime office rents are expected to increase further in 2011. Singapore CBD

Rents Quoted In

Rent

Annual Rental Growth %
16%

NET INTERNAL AREA Rent US$/sq.ft/yr Rent /sq.m/yr

Rental Trend 2011

S$ per sq.ft per month

7.95

74.47

597.51



·

South Korea · The overall Seoul office market in 2010 was subdued with an oversupply of space and reductions in demand due to the global and domestic economic slowdown. More prime office space will be completed and released into the market in 2011, pushing vacancy of prime space higher. However, due to the expected recovery in the domestic economy, rents should hold firm over the year. Seoul CBD Seoul Gangnam Seoul Yeouido KRW per sq.m per month KRW per sq.m per month KRW per sq.m per month 30,394.00 26,819.00 19,328.00 0% 1% 3% 35.23 31.09 22.40 282.67 249.42 179.76

·

Taiwan · Rental growth was subdued in 2010, due to a fall in demand for larger floorplates in Taipei. As a result the supply of Grade A space has increased accordingly. However, with no new completions expected in 2011, rents are anticipated to rise over the year as occupier demand begins to recover. Taipei (Xinyi Planned Area) NT$ per ping per month 4,365.00 3% 62.60 502.31

·

Thailand · Rents in Bangkok were largely unchanged in 2010, with encouraging occupier demand offset by a number of schemes delivered to the market. Supply levels are anticipated to increase further in 2011, but with demand levels also expected to rise, this should help keep rental values stable. Bangkok CBD Baht per sq.m per month 715.00 -1% 31.20 250.35

·

Vietnam · There is a market recovery underway in Ho Chi Minh City due to improving leasing activity, and as a result, rents rose by almost 30%. Demand for office space is expected to rise further in 2011 in Ho Chi Minh City. However, significant new supply will be completed and rents will decrease gradually. Ho Chi Minh City CBD US$ per sq.m per month 45.00 29% 50.17 402.50

·

Hanoi CBD

US$ per sq.m per month

41.50

-2%

46.27

371.20



EUROPE Austria · Austria's occupier market was characterised by limited new supply and stable prime rents in Vienna throughout 2010. Market sentiment is improving and the delivery of new good quality stock in 2011 should boost annual take up levels. Vienna Central Euro per sq.m per month 22.50 0% 39.59 317.65

·

Innsbruck CBD

Euro per sq.m per month

10.75

2%

18.92

151.76



Belgium · The Belgian office market was largely unchanged over the year with rental values holding firm in 2010, with the principal Quartier Leopold submarket subdued. However, an improvement in business confidence may result in demand levels rising and increasing pressure on rental values. Brussels Quartier Leopold Euro per sq.m per year 265.00 0% 40.80 327.35

·

Antwerp Centre

Euro per sq.m per year

135.00

0%

20.78

166.76



Bulgaria · The Sofia office market remains oversupplied and occupier demand was also weak over the year. As a result, prime rents fell in 2010. Prime office space continues to increase and although there was a relatively slight improvement in demand, it is not expected to keep pace in 2011, resulting in further pressure on rental levels. Sofia CBD Euro per sq.m per year 147.00 -9% 22.72 182.28

·

Croatia · Despite rents falling over the year, the office market in Zagreb recorded significant increases in take-up levels. However, demand for high quality space remained muted. The outlook for 2011 is for rents to stagnate due to the ongoing low levels of occupier demand within Zagreb. Zagreb CBD Euro per sq.m per month 16.50 -3% 24.68 198.00

·

11

COUNTRY SUMMARIES

City Country Overview
EUROPE Czech Republic · Rents held firm over the year throughout the Czech Republic, due to subdued demand in what remains a tenant led market. The overall office market within the Czech Republic is expected to remain quiet throughout 2011, with rental values largely stable. Prague CBD

Rents Quoted In

Rent

Annual Rental Growth %
0%

NET INTERNAL AREA Rent US$/sq.ft/yr Rent /sq.m/yr

Rental Trend 2011

Euro per sq.m per month

21.00

37.06

297.36



·

Brno CBD

Euro per sq.m per month

12.00

0%

21.18

169.92



Denmark · Rental levels were unchanged in 2010 and although there was increasing demand for office space, the vacancy rate remains high in Copenhagen. With slow but stable economic growth, the Danish office market is expected to remain stable in 2011, with demand focussed on prime locations in Copenhagen. Copenhagen Harbour Area DKr per sq.m per year 1,900.00 0% 39.25 314.95

·

Aarhus CBD

DKr per sq.m per year

1,100.00

0%

22.73

182.34



Estonia · Rental values declined over the year, with rents in Tallinn moving down by 8%. Tallinn remains a tenant led market with incentives anticipated to rise further in 2011. As a result, rents are expected to remain unchanged over the year. Tallinn CBD Euro per sq.m per month 11.50 -8% 20.30 162.84

·

Finland · · The Helsinki office market has steadily grown more active with rental values holding firm in 2010. Demand for space is expected to continue to rise in 2011 and steady rental growth is anticipated during the year as a result. Helsinki CBD Euro per sq.m per month 25.00 0% 37.39 300.00

France · Rental values increased over the year, due to the scarcity of new quality space in prime submarkets, as well as a slow increase in demand. Prime rents are expected to rise further in 2011 as the lack of new supply and sustained occupier demand ensures further upward pressure. Paris CBD Paris La Defense Lyon CBD Marseille CBD Euro per sq.m per year Euro per sq.m per year Euro per sq.m per year Euro per sq.m per year 760.00 570.00 260.00 230.00 9% 4% 0% 7% 94.72 71.04 32.41 28.67 760.00 570.00 260.00 230.00

·

Germany · Market activity and sentiment increased in 2010, as more new leasing deals were completed indicating that companies are again willing to make long term commitments. Rental growth across the country was still subdued, rising by 2%, but a further rise in rents is anticipated in 2011, especially in those markets with a scarce supply of Grade A space. Berlin CBD Frankfurt CBD Hamburg CBD Munich CBD Dusseldorf CBD Greece · Due to declining levels of demand, development activity is virtually non-existent and vacancy has climbed above 8%, to a five year high. Despite rental values easing down by 3%, incentives remain high and the market is expected to remain slow in 2011 and occupier activity will remain driven by cost cutting and space rationalisation. Athens Syntagma Square Euro per sq.m per month 28.00 -3% 51.73 415.06 Euro per sq.m per month Euro per sq.m per month Euro per sq.m per month Euro per sq.m per month Euro per sq.m per month 21.00 35.00 22.50 29.00 23.00 2% 3% -2% 0% 5% 31.41 52.35 33.65 51.03 34.40 252.00 420.00 270.00 409.41 276.00

·

·

Hungary · Prime rents in Budapest increased by 5% over the year as positive market sentiment returned. The imbalance between supply and demand is expected to ease on the back of healthy demand levels and a lack of new completions in 2011. Further upward pressure on rental values is anticipated as a result. Budapest Pest CBD Euro per sq.m per month 21.00 5% 36.95 296.47

·

Ireland · Prime rents fell across Ireland by almost 20%, which is primarily due to the weak economic climate and a decline in occupier demand. Supply of new office space is drastically reduced and new high specification buildings in prime locations are becoming scarce, posing particular issues for large occupiers wishing to relocate. Dublin 2/4 Districts Dublin International Financial Services Centre Cork CBD Euro per sq.m per year Euro per sq.m per year Euro per sq.m per year 323.00 215.00 170.00 -14% -29% -15% 40.26 26.80 21.19 323.00 215.00 170.00

·

12

COUNTRY SUMMARIES

City Country Overview
EUROPE Italy · Prime rents increased by 7% in 2010 as market sentiment continued to be positive, with rental values in Milan moving up by 10%. Occupier demand is anticipated to rise further in 2011, with Milan again expected to lead the way in terms of rental growth across the country. Rome CBD Milan CBD Bologna CBD

Rents Quoted In

Rent

Annual Rental Growth %
4% 10% 6%

NET INTERNAL AREA Rent US$/sq.ft/yr Rent /sq.m/yr

Rental Trend 2011

Euro per sq.m per year Euro per sq.m per year Euro per sq.m per year

500.00 550.00 170.00

77.27 85.00 26.27

620.00 682.00 210.80



·

Kazakhstan · Prime rents for Grade A space increased by 33% in Astana over the year due to increased demand from occupiers. The markets of Astana and Almaty remain polarized, with an occupier focus and developer activity concentrated on Astana, with Almaty the more subdued. Astana CBD US$ per sq.m per month 40.00 33% 52.62 422.18

·

Almaty CBD

US$ per sq.m per month

45.00

29%

59.20

474.96



Latvia · The Latvian office market saw little significant activity in 2010, but prime rents held firm. The outlook for the office market is increasingly positive for 2011, as current market conditions are favourable for increases in occupier demand. Riga CBD Euro per sq.m per month 12.00 0% 21.18 169.92

·

Lithuania · A shortage of Grade A stock in Vilnius resulted in rental values appreciating by 12% in 2010 despite a still subdued lack of market activity. Occupier demand is expected to rise in 2011 as the economic recovery broadens, increasing pressure on scarce prime space. Vilnius CBD Euro per sq.m per month 13.75 12% 24.27 194.70

·

Luxembourg · Prime rents increased by 11% in Luxembourg over the year, as the levels of active demand firmed. Due to a lack of speculative construction and an increase in occupier demand, rents are expected to remain under pressure throughout 2011 and further rises cannot be discounted. Luxembourg City CBD Euro per sq.m per month 40.00 11% 70.38 564.71

·

Netherlands · In 2010 the occupier market remained subdued with increasing supply and vacancy levels. Additionally, there is an increasing polarisation between prime and secondary stock. The occupier market is expected to remain stable for key markets in 2011, with a slow, steady increase in demand as the economic recovery gathers pace. Amsterdam Zuidas Euro per sq.m per year 360.00 0% 52.79 423.53

·

Rotterdam CBD

Euro per sq.m per year

180.00

0%

26.39

211.76



Norway · Prime rents increased in Oslo by 5% over the year as business confidence increased within the domestic market. In 2011, strong economic fundamentals are anticipated to increase activity in the occupier market and push up prime rents in Oslo. Oslo CBD NKr per sq.m per year 3,300.00 5% 62.05 497.88

·

Bergen CBD

NKr per sq.m per year

2,000.00

0%

37.61

301.74



Poland · Prime rents in Warsaw increased by 11% in 2010 with occupier demand and take up levels moving up significantly. Economic growth should ensure that activity in the occupier market remains healthy and rental growth is anticipated throughout 2011, as competition for Grade A space continues. Warsaw CBD Krakow CBD · Wroclaw CBD Euro per sq.m per month Euro per sq.m per month Euro per sq.m per month 24.50 15.00 15.00 11% -6% 0% 43.11 26.39 26.39 345.88 211.76 211.76

Portugal · Although prime rents remained stable over the year, occupier demand eased down, as domestic economic difficulties remain. Market recovery is unlikely to occur in 2011 and the slowdown in demand is expected to continue, driven by consolidation not expansion. Lisbon Av da Liberdade Euro per sq.m per month 19.00 0% 33.43 268.24

·

Porto CBD

Euro per sq.m per month

15.00

-6%

26.39

211.76



13

COUNTRY SUMMARIES

City Country Overview
EUROPE Romania · Prime rents fell in Bucharest by 5% as occupier demand remained weak for the majority of 2010. However, 2011 is anticipated to see increased activity as tenants are reassessing their need for space and a number of pre-recession contracts are expiring, although consolidation of space remains a key consideration. Bucharest CBD

Rents Quoted In

Rent

Annual Rental Growth %
-5%

NET INTERNAL AREA Rent US$/sq.ft/yr Rent /sq.m/yr

Rental Trend 2011

Euro per sq.m per month

18.50

32.55

261.18



·

Timisoara CBD

Euro per sq.m per month

11.50

-4%

20.23

162.35



Russia · Prime rents in Moscow rose by 6% in 2010, due to increasing occupier demand and a shortage of prime buildings. If the current rate of take-up activity is sustained throughout 2011, supply will be increasingly limited for Grade A space and rental rates are expected to be pushed up further. Moscow CBD US$ per sq.m per year 850.00 6% 92.90 745.38

·

Serbia · With further increases in supply and persistent weak demand, prime rents in Belgrade remained stable over the year, although incentives continued to rise. In 2011, demand is expected to still be stimulated by landlord incentives and occupier cost-cutting measures until high levels of supply begin to decline. Belgrade CBD Euro per sq.m per year 192.00 0% 28.24 226.56

·

Slovakia · Prime office rents have edged up over the past year and take-up levels increased, indicating signs of a tentative recovery in the market. Availability is expected to continue to fall in 2011, as the development pipeline remains restricted due to the lack of available capital. Rental growth is anticipated to remain slow but steady. Bratislava CBD Euro per sq.m per month 17.50 3% 30.88 247.80

·

Slovenia · The Slovenian office market eased down marginally over the year, with rents falling by 6%. The outlook for 2011 is for the market to remain largely stable with the current balance between supply and demand expected to be unchanged throughout most of the year. Ljubljana CBD Euro per sq.m per month 16.00 -6% 28.24 226.50

·

Spain · Due to a decline in occupier demand, prime rents fell by 7% in both Madrid and Barcelona in 2010. The outlook for the occupier market is that rents will stabilise albeit with a modest first half in H1 and secondary areas still weak. Madrid CBD Euro per sq.m per year 336.00 -7% 51.93 416.64

·

Barcelona CBD

Euro per sq.m per year

234.00

-7%

36.16

290.16



Sweden · Due to improved business sentiment, there is a healthy and increasing demand for quality office space and consequently prime rents increased by 8% in Stockholm. · Demand for prime property is anticipated to increase, and, without any significant increases in stock, this may lead to further upward pressure on rents.

Stockholm Birger Jarlsgatan

Skr per sq.m per year

4,200.00

8%

68.28

547.86



Gothenburg CBD

Skr per sq.m per year

2,200.00

5%

35.77

286.98



Switzerland · · The Swiss office market remained stable over 2010 and prime rents remained unchanged. Demand is expected to increase in 2011 and while Geneva faces a limited development pipeline due to a lack of available land, Zurich plans to increase supply as more space is scheduled to be released onto the market. Zurich CBD Geneva CBD SFr per sq.m per year SFr per sq.m per year 800.00 750.00 0% 0% 93.81 87.94 752.64 705.60



Turkey · Vacancy rates significantly decreased in Istanbul, placing pressure on prime rents, which increased by 3% in 2010. Due to a strong push by the Turkish government to make Istanbul a new "financial centre", many companies will relocate from Ankara and stimulate demand for prime space in Istanbul. Istanbul European Side (Levent) Ankara CBD US$ per sq.m per year 432.00 3% 49.77 399.28

·

US$ per sq.m per year

252.00

-5%

29.03

232.92



14

COUNTRY SUMMARIES

City Country Overview
EUROPE Ukraine · Whilst the Ukrainian office market remained stable in 2010, with no significant changes in supply, prime rents in Kyiv increased by 5% over the year due to a tentative return of business confidence to the market. In 2011, a number of new developments are scheduled for completion thus increasing the supply of space within Kyiv and keeping rents stable. Kyiv CBD

Rents Quoted In

Rent

Annual Rental Growth %
5%

NET INTERNAL AREA Rent US$/sq.ft./yr Rent /sq.m/yr

Rental Trend 2011

US$ per sq.m per year

420.00

39.02

313.06



·

United Kingdom · Prime rents have rebounded in London, especially for the West End submarket where they increased by 27%, while across the rest of the UK a more mixed picture remains. The supply of Grade A space continues to be eroded across the UK and, with few speculative developments in the pipeline, rents for Grade A space are anticipated to keep on rising, albeit at a slow rate. London (West End) London (City) Manchester Birmingham Belfast Edinburgh Glasgow St.Peter Port £ per sq.m per year £ per sq.m per year £ per sq.m per year £ per sq.m per year £ per sq.m per year £ per sq.m per year £ per sq.m per year £ per sq.m per year 1,023.00 592.00 307.00 312.00 135.00 291.00 312.00 457.50 27% 25% 0% 5% -13% -3% 11% 0% 148.80 86.11 44.66 45.38 19.64 42.33 45.38 66.55 1193.84 690.86 358.27 364.10 157.54 339.60 364.10 533.90

·

AFRICA & THE MIDDLE EAST Bahrain · The principal office market in Bahrain, Manama, continued to be oversupplied in terms of Grade A space, and when combined with an easing in occupier demand, rents declined significantly in 2010. However, the development pipeline has noticeably slowed and the occupational market should start to show signs of recovery towards the end of 2011. Manama BHD per sq.m per month 10.00 -33% 29.57 237.25

·

Egypt · There is currently a shortage of Grade A office space in Cairo, although the easing in occupier demand saw rents hold firm in 2010. The immediate outlook for the demand picture meanwhile, will be clouded until the recent political environment stabilises once more. Cairo CBD US$ per sq.m per month 30.00 0% 33.45 268.34

·

Israel · Rents have risen over the year in Israel due to improved market demand coupled with no major new developments. Due to limited supply expected in 2011, rental values are anticipated to increase further with Tel Aviv showing the most significant growth. Tel Aviv CBD NIS per sq.m per month 88.00 13% 34.22 274.56

·

Tel Aviv (Ramat Hahayal)

NIS per sq.m per month

70.00

-5%

27.22

218.40



Jordan · With stable demand and only a small amount of space coming onto the market in Amman, rents remained stable over the year. In 2011 there is scheduled to be limited supply coming to the market but although businesses are looking to expand, rental pressure should remain minimal. Amman CBD US$ per sq.m per year 200.00 0% 23.04 184.85

·

Kuwait · · The Kuwaiti office market remained stable over the year with no rental growth reported in 2010. A large number of developments, started before the financial crisis, are due to be released onto the market in 2011 with the risk of oversupplying the market. Rents held firm in Lebanon in 2010. There was an increasing trend of occupiers seeking to move out of the CBD for better rental deals. Rental values are expected to remain stable in 2011 due to the limited amount of supply and cautious occupier sentiment. Similar to other locations in the Middle East, Muscat experienced a decline in rental values in 2010. There is a significant amount of space due to be delivered in 2011, which will add to the downward pressure on rents. However, any upturn in the occupational market should help to ease this pressure. Muscat CBD Omani Rial per sq.m per month 8.00 -27% 23.17 185.87 Beirut CBD US$ per sq.m per year 400.00 0% 45.91 368.30 Kuwait City CBD US$ per sq.m per year 200.00 0% 23.04 184.85

Lebanon ·

·

Oman · ·

15

COUNTRY SUMMARIES

City Country Overview
AFRICA & THE MIDDLE EAST Qatar · Occupational demand has continued to fall significantly in all locations from their peak in 2008, consequently prime rents fell in Doha by 17% in 2010. Due to a marked slow down in demand, the office market is now in a state of over-supply but due to an anticipated rise in occupier demand, rental values are expected to hold firm in 2011. Rents eased down in Riyadh but held firm in Jeddah over 2010, as the market continues to mature. Both Riyadh and Jeddah suffer from a shortage of Grade A space. However, with occupational demand levels still subdued, rents are not expected to increase significantly in 2011. In 2010 office rents throughout the country fell as occupier demand grew more cautious. Riyadh CBD Jeddah CBD Doha CBD

Rents Quoted In

Rent

Annual Rental Growth %
-17%

NET INTERNAL AREA Rent US$/sq.ft/yr Rent /sq.m/yr

Rental Trend 2011

Qatari Rial per sq.m per month

200.00

61.24

491.34



·

Saudi Arabia · · Saudi Arabian Riyal per sq.m per year Saudi Arabian Riyal per sq.m per year 1,400.00 1,000.00 -3% 0% 34.68 24.77 278.26 198.76

South Africa · Durban CBD Durban La Lucia/Berea Cape Town CBD Cape Town Bellville Johannesburg CBD Sandton CBD R per sq.m per month R per sq.m per month R per sq.m per month R per sq.m per month R per sq.m per month R per sq.m per month 50.00 100.00 85.00 75.00 65.00 126.25 -17% -15% -11% -20% 0% 0% 8.43 16.85 14.32 12.64 10.95 21.27 67.60 135.21 114.92 101.40 87.88 170.70

·

Vacancy rates will continue to climb across all sectors of the market during 2011, which will put further pressure on rental values. Prime rents eased by 7% over the year in Damascus, due to an easing in occupier demand. The outlook for 2011 is for slowly increasing occupier demand, and rents are anticipated to hold firm over the year.

Syria · · Damascus CBD US$ per sq.m per year 350.00 -7% 40.32 323.49

UAE · Dubai continues to suffer from high vacancy rates and an oversupply. As a result, rents fell significantly in 2010. In Abu Dhabi, the commercial sector was driven by tenants looking to renegotiate lease terms and take advantage of softening prices as rents for prime office space fell by almost 30% over the year. Recovery in both areas will be muted in 2011 until supply levels stabilise. Abu Dhabi CBD AED per sq.m per year 2,500.00 -29% 63.23 507.34

·

Dubai CBD (excluding DIFC)

AED per sq.ft per year

180.00

-20%

49.00

393.19



16

RESEARCH SERVICES

EXCHANGE RATES
Country
South Africa Brazil Canada Australia China Hong Kong India Indonesia Japan South Korea Malaysia New Zealand Norway Philippines Singapore

Local Currency
Rand Real Dollar Dollar Renminbi Dollar Rupee Rupiah Yen SKR Ringgit Dollar Kroner Peso Dollar

US$
0.1512 0.6024 1.0063 1.0250 0.1518 0.1286 0.0224 0.0001110 0.0123 0.0009 0.3243 0.7812 0.1720 0.0228 0.7806

Euro
0.1127 0.4490 0.7502 0.7641 0.1134 0.0959 0.0167 0.0000827 0.0092 0.0007 0.2417 0.5823 0.1282 0.0170 0.5819

Country
Taiwan Thailand Denmark Sweden Switzerland United Kingdom Kuwait Israel Bahrain Oman Qatar Saudi Arabia UAE Eurozone US

Local Currency
Dollar Baht Krone Krona Franc Pound Dinar Shekel Dinar Rial Rial Riyal Dirham Euro Dollar

US$
0.0343 0.0332 0.1800 0.1487 1.0728 1.5657 3.5549 0.2824 2.6525 2.5974 0.2746 0.2666 0.2722 1.3416 1.0000

Euro
0.0256 0.0247 0.1342 0.1109 0.7997 1.1670 2.6497 0.2105 1.9771 1.9361 0.2047 0.1988 0.2029 1.0000 0.7454

Source: Financial Times, 31st December 2010

CONTACTS
Further information and copies of this report are available from Michelle Mejia. Telephone: Email: +44 (0)207 152 5800
michelle.mejia@eur.cushwake.com

David Hutchings Head of European Research Group LONDON Tel: +44 (0)207 152 5029
david.hutchings@eur.cushwake.com

Elaine Rossall European Research Group LONDON Tel: +44 (0)207 152 5319 elaine.rossall@eur.cushwake.com

Barrie David European Research Group LONDON Tel: +44 (0)207 152 5937 barrie.david@eur.cushwake.com

For industry-leading intelligence to support your real estate and business decisions, go to Cushman & Wakefield's Knowledge Center at cushmanwakefield.com/knowledge

TECHNICAL SPECIFICATION For each location a standard definition of a prime unit is employed to endeavour to make the results as comparable as possible given varying local practices. Rents are often quoted on different measurement basis and for this reason we have standardised the office rents used in this guide by adjusting the rent to a net internal area basis. Some countries quote their rents inclusive and some exclusive of service charge and property taxes, so in order to make a more detailed comparison across regions, the total occupancy costs should be used. CBD office figures relate to new prime centre, high specification units of a standard size commensurate with demand in each location. The Non CBD zone is a distinct office submarket, principally serving corporate rather than local users but may be complementary or competing with the CBD itself. It is not necessarily abutting the principal CBD, however it is located within the immediate sphere of influence of the city. The Net Internal Areas figures have been calculated by standardising the floorspace measurements on which the quoted rent is based. Cushman & Wakefield Asia quote all rents on a net usable area and quote effective rents, which takes into account rent free period or capital contributions where appropriate, security deposits are not included. These rents have not been adjusted. Direct Class A rents are quoted in all US locations. Rents have been expressed in US$ per sq. ft per year and Euros per sq. m per year, converted using exchange rates as at December of the relevant year. Rental growth figures are quoted in local currency unless otherwise indicated. Total occupancy costs take into account service charges and local taxes to allow direct comparison between countries.

For further information, please contact our Research Department: Cushman & Wakefield LLP 43-45 Portman Square London W1A 3BG www.cushmanwakefield.com

This report contains information available to the public and has been relied upon by Cushman & Wakefield on the basis that it is accurate and complete. Cushman & Wakefield accepts no responsibility if this should prove not to be the case. No warranty or representation, express or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by our principals. © 2011 Cushman & Wakefield LLP. All right reserved.

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