Global office market fundamentals still solid

Many office markets continue to post solid fundamentals despite year-long volatility in financial markets, according to the latest Colliers Global Office Real Estate Review, which currently features 172 office markets. Nonetheless, Colliers believes that in the second half of 2008 and 2009, office markets in all regions should become more subdued as the global economy slows and lenders remained cautious.

To date in 2008, however, while demand for office space was below the record levels seen in much of 2005-2007, Colliers said much of Central and Eastern Europe, Asia Pacific, Latin America and the Middle East continued to demonstrate robust leasing conditions with few exceptions. On the other hand, numerous Western European markets have already shown signs of weakness, and have been characterised by rising vacancy and a corresponding softness in rents, Colliers said.

Despite the lessening in demand in both Paris and London City rents, both cities were among those registering relatively high levels of office construction activity in the first half of the year.