Global demand for office space returning to normal, says Colliers

Office real estate markets around the world took another step towards returning to normal in the past six months, according to Colliers International. The property adviser's Global Office Real Estate Review for the first six months of 2010 suggests there are 'increasing signs'in most markets that the worst of the global crisis is over.

Leasing activity is up significantly compared to the previous six months. In particular, Asia Pacific, Latin America and Canada all post healthy growth rates and show signs of future expansion. The outlook for the balance of 2010 and into 2011 is for continued signs of growth, and a general sentiment that 'the worst appears to be over', the report says.

However, a rise in vacancy was felt across the EMEA region, but was particularly acute in Dubai, Riyadh, Sofia, Bucharest, Athens, Abu Dhabi, Budapest, Johannesburg and Tirana. Colliers says that all of these markets saw their respective vacancy rates rise by at least 4%-points in the first half of 2010. The highest vacancy levels are found in Riga and Dubai - both with 30% vacant office space.

While the trend for the EMEA region is still up, vacancy rates in central London, Madrid, Dublin, Moscow, and Tel Aviv all fell during first half of the year. Notable cities registering increases in asking rents included London, Paris, Tel Aviv, and Zurich. London again retained its position as the most expensive office market in the region, with current average Class A asking rents in the West End sub-market at EUR 95/m2/month, according to the report.