Global office rents and real estate values have increased modestly during the second quarter of this year, according to new data from CBRE.
Both the CBRE Global Office Rent and Global Capital Value Indices rose by 0.3% during the second quarter. The modest increases are attributed to the global economic slowdown that continues to hamper the real estate recovery. With the exception of the Americas, CBRE's Global and Regional Capital Value Indices have seen little or no improvement since the third quarter of 2011.
During the second quarter, the U.S. leasing market was stronger than other regions, with rent growth remaining positive while other regions have flattened. As a result, the Americas region recorded both the strongest quarter-over-quarter and year-over-year growth rates – 1% and 3%, respectively. Asia Pacific rents were essentially flat during the quarter, and significantly short of the 13.4% annual increase witnessed in the second quarter of 2011.
The relative strength of the Americas – posting a 1.5% quarterly growth – drove the CBRE Global Capital Value index upward at a modest rate. However, the global growth rate has been weakened by the EMEA Capital Value Index, which fell 1% during the second quarter, its third consecutive quarterly setback. Meanwhile, the Asia Pacific Index level has held steady for the past several quarters.
‘Rental rates and capital value improvements have slowed dramatically following considerable recoveries during 2011,’ says Raymond Torto, CBRE's global chief economist. ‘However, despite the economic uncertainty, this quarter provided evidence, that while both occupiers and investors remain highly cost-conscious, they are also forging ahead with expansions or investments in prime spaces. This dynamic has helped to bolster rental rates and capital values ever-so-slightly, and particularly in the U.S. market.’