Colliers International: Global Office Markets Search for Economic Equilibrium

SEATTLE, June 4, 2013 /PRNewswire-USNewswire/ -- According to a new Global Office report by Colliers International, global markets are aiming for a state of economic equilibrium between supply and demand after weathering challenges in China, the U.S. and Europe. While some markets appear to still be lagging, the majority are experiencing more stability than they have in some time.

"Office markets around the world have survived the challenges of a slowing Chinese economy, a mixed American recovery, and a European market that is still finding its economic footing," said James Cook, Director of Research at Colliers International. "Now, for the first time in several years, we're experiencing balance on a global level."

Colliers experts point to several key trends in 2013 that underscore this search for equilibrium:

United States and Canada: Strength in the ICEE (intellectual capital, energy and education) markets will remain the primary driver of office-using employment growth through this year, with the vacancy rate improving to nearly 14 percent in the first quarter of 2013, dropping for the fifth consecutive quarter. Meanwhile a strong rebound in the for-sale housing market is poised to benefit U.S. suburban office markets in 2013 a variety of service providers open offices and resume hiring to cater to new developments, particularly in hard-hit markets like Phoenix, Las Vegas and parts of Florida.

Mexico City:  Office development is strong, with 20 new buildings developed in 2012, 54 more under construction in the first quarter of 2013, and a 17 percent increase in absorption. In the next five years, Mexico City's office inventory is expected to increase by about 3.2 million square feet, but with a stable vacancy rate, the market should have enough absorption to fill the new properties.

Beijing:  While demand for Class A space decreased in the second half of 2012 and absorption also decreased significantly, overall rental rates still grew by nearly 20 percent. Demand is expected to remain largely stable for the remainder of 2013.

Sydney and Melbourne: Domestic investment has doubled since 2011, now making up 78 percent, and is expected to remain strong. The leasing market remains slow despite tightening vacancy rates, positive absorption and rental growth, with most activity focused on lease renewals and consolidations. In Melbourne, a lack of business confidence has led to a slowdown in demand and tenant commitment. However, Colliers experts expect certainty to return to the market and drive demand in 2014.

Mumbai: Office absorption rose through 2012 despite occupier caution, with demand driven by the banking, financial services, insurance and IT industries. Colliers expects healthy demand to continue in 2013 with The Andheri, BKC, and Lower Parel submarkets the preferred destination due to availability of Class A space.

Europe: While the threat of a Eurozone break-up has diminished, the European office market continues to operate at a slow pace, with pockets of rental growth in parts of Northern Europe like Germany and the Nordics, and  rental weakness across most of Southern Europe and some fringe Central and Eastern markets. In Germany, occupier demand began rising in the first quarter of 2013, while demand in Paris is expected to stabilize this year.

The report also covers South American markets Sao Paulo, Rio de Janeiro, Buenos Aires, Bogota and Lima; Asian markets Beijing, Shanghai, Hong Kong, Tokyo and Seoul; Australian markets Adelaide, Auckland and Wellington; Indonesian markets Singapore, Taipei and Makati; Indian markets Mumbai, Delhi, Bangalore and Chennai; as well as European markets Germany, Paris, London, Manchester and Dublin.

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About Colliers International
Colliers International is a global leader in commercial real estate services, with over 13,500 professionals operating out of more than 482 offices in 62 countries. A subsidiary of FirstService Corporation (NASDAQ: FSRV; TSX: FSV and FSV.PR.U), Colliers International delivers a full range of services to real estate users, owners and investors worldwide, including global corporate solutions, brokerage, property and asset management, hotel investment sales and consulting, valuation, consulting and appraisal services, mortgage banking and insightful research. The latest annual survey by the Lipsey Company ranked Colliers International as the second-most recognized commercial real estate firm in the world.

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SOURCE Colliers International