The Office Market: Beyond London & NYC?
- Oct 14, 2008
New York City and London–two of the world’s core financial hubs–are struggling to cope with the economic slowdown that has sparked a massive amount of downsizing and forced many firms to either merge or go out of business. As a result, office vacancy levels and rents have weakened, spurring industry insiders to ponder which global markets are still poised for growth. Tokyo topped Real Capital Analytics Inc.’s mid-year office-property-sales ranking. But the firm’s report, “Investment Market Erosion Spreads and Intensifies,” notes that Tokyo is also susceptible to diluted investment prospects attributable to its connection to the financial sector. Meanwhile, emerging markets are pulling in capital, but they are not expected to reel in a significant chunk of investment from buyers seeking to cozy up to options beyond mainstays London and New York City. “Instead, these buyers are more likely to stay focused on the proven core markets they are most familiar with–especially as yields there rise,” the report states. Ultimately, while Chicago, Paris, San Francisco and Singapore are among the core markets that share a number of buyers with London and New York City, “Paris may be the primary beneficiary,” since buyers in New York and London shelled out almost $4 billion on Parisian properties over the past year, according to the report.