The commercial real estate market is quickly becomming an international market with large tenants, commercial real estate agents and developers expanding to other countries. The expansion is not just from the U.S. outward to other countries but also from other countries here. For example one of the major shopping center developers in the U.S. is Westfield Group, an Australian firm. We expect the internationalization of commercial real estate to grow substantially in comming years. The following article should be interesting to those who follow these events.
Global Real Estate Markets See Boom
Article by Anita Howarth Via GlobeSt
Commercial real estate markets in key cities around the world are booming as globalization pushes the economies of large international cities to converge.
All 10 global business centers now have vacancy rates below 10%, a milestone in the ongoing worldwide recovery of commercial real estate. Globalization of trade and borderless movement of money have allowed key cities to rebound in tandem relatively quickly from the real estate decline that followed the technology bust in 2000.
Hong Kong, which was hit by the dotcom collapse and suffered another blow after the SARS outbreak in 2003, has rebounded quickly and strongly. The city saw asking rents shoot up 37% in the past 12 months to an average of $69.12 per sf as the vacancy rate fell to 4.1%. And by mid-year Tokyo’s vacancy rate of 0.6% was down from 2.2% and spurred a 12% jump in average asking rent to $148.17 per sf.
London’s asking rent rose 17% to an average of $163.23, and Madrid also logged a 17% increase, to a $43.18 average. London and Madrid vacancy stood at 5.7% and 8.2% respectively, at mid-year 2006. And in Paris, asking rents rose to $80 per sf, up 5.1%, while vacancy stood at 4.8%, down 0.7%.
In North America, Toronto asking rents rose 9% to an average of $24.58 at mid-year, as vacancy rates slid to 5.2% from 8.4% at mid-year 2005. New York registered a 7% increase in asking rent to an average of $47.30, and vacancy fell 1.8% to 6.3%. Washington, DC which was the only major US city to thrive after the dotcom bust, saw asking rents rise $45.50, up 0.6%. Despite a tremendous rise in development, vacancy continued to fall, down 0.6% to 7.3%.
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