Rental decline is worse in Hong Kong.
According to recent report by Jones Lan LaSalle (JLL), rents for prime office space in the world’s major cities grew by an average of 0.2% during Q3 2012, down from 0.6% in Q2 2012.
On an annualised basis, prime rents were up 2.0%, the lowest year-on-year growth in two years.
Asia Pacific’s markets have seen quarterly rental growth moderate from 1.0% in Q2 to just 0.5% in Q3, largely due to slower rental uplift in markets such as Shanghai and Beijing, coupled with further declines in Hong Kong and Singapore and falls in most Australian markets, said JLL.
Here's more from JLL:
As economic headwinds strengthen, the Americas also saw growth decelerating to 0.6% quarter-on-quarter from the 1.1% registered in Q2. Given the negative economic backdrop, rents in Europe corrected by a further 0.4%, the third consecutive quarterly decline.
Across the 90 monitored markets, Jakarta (+34.2% y-o-y) and Beijing (+31.8%) rank as the strongest performers. A number of Latin American markets also feature in the ‘top 10’: Mexico City (+26.3%), São Paulo (+12.5%) and Monterrey (+9.1%). Robust demand from the technology and commodities sectors continues to support healthy annual rental growth in a number of markets such as San Francisco (+18.8%), Silicon Valley (+10.5%), Perth (+11.7%), Bangalore (+9.4%) and Chennai (+8.3%).
A third of the markets covered by the Index registered rental declines in Q3, compared with just a quarter of all markets in Q2, reflecting a range of factors including weak corporate occupier demand (particularly from the financial sector), oversupply or poor economic fundamentals.
The largest quarterly falls were recorded in Detroit (-4.5%), Melbourne (-3.1%) and Brisbane (-2.4%). In Europe, Paris, Milan, Madrid, Utrecht and
The Hague all registered declines of between 1.9% and 2.4%, while in Asia Pacific, Singapore and Hong Kong experienced decreases of 1.2% and 2.2% respectively. In the Americas, the Canadian markets of Toronto, Vancouver and Montreal all recorded declines of between 1.2% and 1.6%.
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