As the credit dislocation continues to play out in the US and other markets, the emerging markets remain “unfazed,” according to a report by real estate services firm, Colliers International, the Global Office Real Estate Review 2008.
The report said emerging markets continued to exhibit “rapid growth and a voracious appetite for office space.”
The Asia Pacific region had “high levels” of office construction with the cities of Bangalore, Beijing, Chennai, Delhi, Guangzhou, Jakarta, Melbourne, Shanghai and Tokyo underway with more than 126 million square feet of construction.
The most expensive office space was found in Hong Kong at $306 per square foot, according to the report, followed by Tokyo at $204 per square foot.
The Europe, Middle East and South African office markets continued to show “reasonable growth” in the second half of 2007 but at a “more modest pace” than in the previous six months of the year. Office construction rose, with Dubai at the head with 39.7 million square feet under construction. Abu Dhabi, Bucharest, Kiev, and Vilnius also saw large increases in office developments in the second half of 2007.
On the rental font, European markets such as Athens, Bratislava, Budapest, Bucharest, and Warsaw saw office rents increase by more than 10 percent since mid-year.
The Latin America region continued with its “remarkable surge” – combining lower vacancies and higher rents across almost all markets. Office vacancies in the region decreased during the second half of 2007 to average 3.8 percent. Except for Buenos Aires, every Latin American market reported higher rents.
Construction in Latin America remained concentrated in the cities of Bogotá, Mexico City, Santiago and Sao Paulo, totaling 17.7 million square feet of office construction underway. Sao Paulo had the most expensive office market in the region, at $84 per square foot.
The US and Canada both recorded a “modest slowdown” in the second half of 2007, according to the report. Average vacancies in the US held steady while office vacancies in Canada decreased to 5.7 percent.