Global comparisons of office markets
There is no doubt that the UK commercial property market is beginning to recover. The sector experienced a tremendous growth in its market sub-sector in 2014. After undergoing financial crisis, the UK office property market has managed to rise to its feet and is now one of the leaders in the industry. A lot of questions are being asked regarding the performance of this market. Most people are wondering on how the UK property market will perform in 2015.
These questions led Cushman and Wakefield to publish the report they found regarding the UK property market. The report was published in November 2014 and is showed some of the trends that the market will experience in 2015. In the report, there was also global markets information. This article will look in details at the report of Cushman and Wakefield. You will also get to know about the trends that you are supposed to look out for in the year 2015. Office market will be the main focus of this article.
The report showed that 80 percent of the markets in Europe will grow in the year 2015. The study covered 21 cities and London emerged to be the best when it comes to office markets performance. London office market will get increased demand as a result of its economic outlook. The trends in 2014 are a clear indication that sectors such as media, tech and creative will grow and this in turn will lead to an increase in the demand for rental properties in the west end. The other thing that will lead to an increase in demand for rental properties is due to the recovery of the banking, finance and insurance sectors.
The development pipeline in the UK office market is very limited. This trend is set to continue like this until 2016. This will lead to a reduction in the floor space of prime office for the next two years. There is no doubt that if this kind of trend continues; there will be an increase in the growth of rental properties.
The report also showed that the UK office market is set to get increased demand which will outweigh the supply. This will take place between the years 2014 and 2016. This kind of demand will lead to a decrease in the vacancy rates that has been experienced in UK markets since the year 2008. Those who occupy offices will look for office premise in other locations and relocate there. This is because of the occupiers need to expand their businesses. However, this is not the only trend that will be experienced in 2015. The other trend that will be experienced in 2015, according to the Cushman and Wakefield report is that there will be an increase in refurbishments, office space conversions and retrofitting.
No matter, where the property market is located, there is no doubt that it cannot exist on its own. The global market is a great determinant on how the UK office market will behave. This information will be of great help to investors as it will enable them to make the needed decisions. Continue reading to find out information on some of the common global trends that affect the property market worldwide.
To start off with, the Gross Domestic Product of Western Europe is at estimated at 1.7 percent. Some of the economies that perform better in the property market are Romania, UK, Hungary and Poland. These four markets have high inventory rates. This rate is from 13 to 18 percent for Warsaw and Bucharest respectively. The markets that are leading when it comes to new office developments are Bucharest, Istanbul, Warsaw, Prague and Moscow. On the other hand, there are markets which are poor when it comes to developments are Lisbon, London, Barcelona and Madrid. The office rental values in Paris, Brussels, Zurich and Dublin, are expected to grow steadily. When it comes to office space, London has high rental values.
Boston, Atlanta and Chicago will experience great growth in terms of its office markets. New York, on the other hand, is set to experience a steady increase in rental growth. This is set to continue until the year 2016. Some of the most promising markets that investors should look out for are Santiago de Chile and Mexico City.