Occupiers continue to seek higher-quality space in markets with robust infrastructure and social amenities, despite weaker global economic growth in Q1 2019 and worries about a U.S./China trade war. The race to attract talent by securing the most desirable work environments remains intense. Combined with limited supply and moderate construction pipelines in most cities, prime office occupancy costs have risen to new heights.
Prime office occupancy costs increased by 3.6% globally for the year ending Q1 2019, significantly higher than the 2.4% rate of a year ago and CBRE’s forecast growth rate of 2.0%. All regions had increased growth rates in prime office occupancy costs from the prior year. APAC’s growth rate nearly doubled to 3.3%, while EMEA had a healthy increase to 3.5% and the Americas increased to 3.7%. Occupancy costs across the world are seemingly moving in unison, with only a few markets seeing slight falls.