OFFICE SPACE ACROSS THE WORLD - Cushman & …

1 2014 OFFICE SPACEACROSS THE WORLDA Cushman & Wakefield Research Publication1 CONTENTSG lobal Summary & Outlook 2 Most Expensive Locations 4 Americas Overview 6 Asia Pacific Overview 7 EMEA Overview 8 Market Metrics 10 Technical Specifications 14 Contacts 15 OFFICE SPACE ACROSS THE WORLDA Cushman & Wakefield Research PublicationINTRODUCTIONW elcome to the Cushman & Wakefield global OFFICE SPACE ACROSS the WORLD publication for 2014 . This report was prepared by the Cushman & Wakefield Research team to provide an analysis of the global OFFICE market during 2013, as well as discuss the industry s main trends for the year ahead. The primary focus of this report is prime OFFICE rental performances and occupancy costs ACROSS the globe, including a ranking of the most expensive locations ACROSS the WORLD in which to occupy OFFICE SPACE . The report also provides a more in-depth rental and occupier overview for each region, concluding with a detailed list of market data pertaining to each OFFICE information and data provided in this report are based on a comprehensive survey of Cushman & Wakefield s international offices, and the editors are extremely grateful to them for their time, effort and assistance.

2 The Cushman & Wakefield Research Group provides a strategic advisory and supporting role to our clients. Consultancy projects are undertaken on a local and international basis, providing in-depth advice and analysis, detailed market appraisals and location and investment strategies. For more information on what Research can do for you, please visit the Contacts page of this report (page 15). To gain access to all of Cushman & Wakefield s research and publications globally, please visit the Research & Insight section of our global OFFICE rents moved up by 3% in 2013, which is the third consecutive year of a similar rental performance. While all three regions overall witnessed a relatively slow pace of rental growth over the year, certain areas such as Africa and the Middle East saw a more buoyant rental market, with prime rents up by as much as 10% in certain MOST EXPENSIVE GLOBAL MARKETSThe most expensive OFFICE market globally was London (West End), which retained its position ahead of Hong Kong in second place.

3 Prime rents in London continued to move up during 2013, bolstered by strong occupier demand and a declining supply of high-quality SPACE . With rents largely unchanged in Hong Kong over the year, the gap in total occupancy costs between London and Hong Kong has, in fact, widened. New Delhi s Connaught Place fell from fourth position to eighth despite prime rents being unchanged in 2013. This was primarily the result of an appreciation in both the US Dollar and Euro against the Indian Rupee in 2013, causing a shift in New Delhi s position in terms of global occupancy costs. Similarly, exchange rate fluctuations with the Japanese Yen caused Tokyo to fall behind other comparable markets like Beijing in the overall ranking despite prime rents in both cities remaining largely unchanged over the Cushman & Wakefield Research Publication% of countries showing rental growth% of countries showing stable rentsAverage Rental Change 3%% of countries showing rental declines46%25%28%RENTAL PERFORMANCE IN THE YEAR TO DEC 20132014 GLOBAL SUMMARY AND OUTLOOK3 OCCUPIER TRENDSThe global occupier market in 2013 was again characterised by caution, as tenants ACROSS the globe remained concerned regarding occupancy costs.

4 Indeed, while some tenants were looking to upgrade to more efficient, cost-effective OFFICE SPACE , many still sought to consolidate their existing operations. Over the year, occupiers retained a focus on well located, high quality SPACE , and demand for this type of accommodation was steadily rising by the end of 2013. As a result, the options open to occupiers tightened, and almost half of the locations analysed within the report witnessed prime rents increase over the year, albeit marginally in most : A MIXED BAGC oming out of the double-digit expansion seen in 2012, prime rental growth in the Americas region was much more subdued, with an overall regional rise of just 1%. Rental performance in South America in 2013 was slow, with muted growth in the key markets of Argentina and Brazil. Ongoing economic uncertainty in both of these markets caused occupier demand to ease and prime rents to fall over the year.

5 Although both Ecuador and Colombia saw burgeoning demand over the year, it was not enough to offset the rental declines in these larger markets. In the year ahead, South America is likely to face more uncertainty, with economic concerns affecting business confidence in a number of locations, although a steady rise in stability ACROSS the region will be seen as North America the USA, demand levels improved in 2013 as the economy recovered quicker than expected. Over the year, the USA saw strong leasing activity, with business confidence improving as the year progressed. However, rental performances were mixed ACROSS the country, with New York (Downtown) and Boston outperforming other markets. The outlook for 2014 is for the USA to continue to see rental levels expand and thus drive the overall regional growth in the year PACIFIC: SLOW BUT STEADYR ental growth was largely flat ACROSS Asia Pacific over the year, with an overall regional rental rise of just 2% in 2013.

6 Economic conditions were more fragile in the first half of the year, although growth in core markets of China and Japan advanced as the year progressed. However, the region is well represented in terms of the most expensive OFFICE locations on a global scale. Hong Kong retained its position in second place overall, Beijing came in fourth position and Tokyo in fifth. Asia Pacific s performance in 2014 is anticipated to be similar to that seen in 2013, with slow and stable demand anticipated to keep rental levels largely unchanged, albeit with incentives becoming more : FROM MARKET TO MARKETIn Europe, a lack of high quality SPACE characterised a number of markets, including London and Frankfurt, and with demand in these cities advancing over the year, prime rents were put under upward pressure. Therefore, although the overall regional picture was relatively muted over the year, there were notable differences from market to market.

7 Looking ahead, the rental trend seen in 2013 will continue in to next year, with rents in the large majority expected to see modest growth, with locations such as London and Dublin experiencing more significant rental growth for good quality SPACE ACROSS THE WORLDA Cushman & Wakefield Research PublicationRent ( )% Rental Growth per Year030045060075090015005101520253050354 045 SandtonCBDD urbanCBDD urbanLa Lucia/BereaQuitoCBDJ akartaCBDB angkokCBDS ingaporeCBDD ublinInt l CentreC ape Tow nCBDNew YorkDowntownRENTRENTAL GROWTHCITIES WITH THE LARGEST RENTAL GROWTH% Rental Change per Year-20-10-501015-155201020092 01120122013 GLOBALAMERICASASIA PACIFICEMEARENTAL PERFORMANCE IN THE 5 YEARS TO DEC 2013 Prime rents in London continued to move up during 2013, bolstered by strong occupier demand and a declining supply of high-quality SPACE . 4 2,500 2,000 1,500 1,000 500 02014 RANK2013 RANKLOC ATION12675834109 OCCUPANCY COST PER SQ.

8 M. PER YEAR141311211215n/a161718192522243126272 9233230n/a432156789101112131415161718192 0212223242526272830313233343428 RENT ADDITIONAL COSTS29 MOST EXPENSIVE LOCATIONS BY COUNTRY ( /SQM/YEAR) 2,122 1,432 1,092 1,027 1,003 993 991 959 895 844 803 777 756 734 718 661 659 593 572 556 540 536 506 505 485 469 457 442 441 439 434 432 427 427 London, UK West EndHong Kong, Hong Kong CentralMoscow, Russia CBDB eijing, China CBDT okyo, Japan CBD (5 Central Wards)New York, USA Midtown (Madison/5th Av.)Rio de Janeiro, Brazil Zona SulNew Delhi, India Connaught PlaceParis, France CBDS ydney, Australia CBDS ingapore, Singapore CBDL uxembourg, Luxembourg City CBDOslo, Norway CBDD ubai, UAE DIFCG eneva, Switzerland CBDA lmaty, Kazakhstan CBDDoha, Qatar CBDS tockholm, Sweden CBDI stanbul, Turkey CBD (Levent)Milan, Italy CentreMunich, Germany CBDT aipei, Taiwan CBD (Xinyi Planned Area)Amsterdam, Netherlands ZuidasBeirut, Lebanon CBDD ublin, Ireland CBD (2/4 Districts)Jakarta, Indonesia CBDTel Aviv, Israel CBDV ancouver, Canada CBDHo Chi Minh City, Vietnam CBDM adrid, Spain CBDS eoul, South Korea CBDH elsinki, Finland CBDT bilisi, Georgia CBDC aracas, Venezuela CBDA Cushman & Wakefield Research Publication20145 LOC ATIONRENT ADDITIONAL COSTSOFFICE SPACE ACROSS THE WORLDMOST EXPENSIVE LOCATIONS BY COUNTRY 2,500 2,000 1,500 1,000 500 02014 RANK2013 RANK20363335373944384043 OCCUPANCY COST PER SQ.

9 M. PER YEAR42474145484652505754495551605361n/a5 856n/a6263383736353940414243444546474849 5051525354555657585960 6162646566675963 426 406 395 393 373 358 345 343 343 342 339 331 318 306 298 289 258 257 242 238 235 234 231 227 227 223 222 221 207 179 179 179 15 0 Bogot , Colombia NogalAuckland, New Zealand CBDW arsaw, Poland CBDB russels, Belgium Quartier LeopoldKyiv, Ukraine CBDA thens, Greece Syntagma SquareCopenhagen, Denmark Harbour AreaKuala Lumpur, Malaysia CBDB udapest, Hungary CBDV ienna, Austria CentralBucharest, Romania CBDB uenos Aires, Argentina CatalinasPrague, Czech Republic CBDM exico City, Mexico CBDL isbon, Portugal Av. de LiberdadeSantiago, Chile Las CondesBangkok, Thailand CBDB ratislava, Slovakia CBDB elgrade, Serbia CBDV ilnius, Lithuania CBDM anila, Philippines MakatiLima, Peru CBDM anama, Bahrain Financial HarbourRiga, Latvia CBDL jubljana, Slovenia CBDS ofia, Bulgaria CBDS kopje, FYRO Macedonia CBDT allinn, Estonia CBDZ agreb, Croatia CBDQ uito, Ecuador CBDA mman, Jordan CBDL imassol, Cyprus CBDS andton, South Africa CBDA Cushman & Wakefield Research Publication6 AMERICASA lthough rental performance ACROSS the Americas barely changed in 2013, there was a notable polarisation in performances between North and South America.

10 Regional rental growth was fuelled by increases in both the USA and Mexico, where prime rents moved up by 4% and 6%, respectively. Most South American locations, however, saw prime rents decline in 2013, with Colombia, and 2013 s frontrunner Brazil, experiencing the largest year-over-year declines. Consequently, this divergence between the two regions gave way for New York City (Madison/5th Avenue) to retake the title of the most expensive market in the Americas region, pushing last year s number one, Rio de Janeiro (Zona Sul), into second place. NORTH AMERICA HOLDING FIRMIn 2013, many OFFICE markets in the USA witnessed robust demand as the economy started to improve at a rate stronger than previously expected, although performances were not uniform ACROSS the entire country for example, New York and Boston both experienced double-digit rental growth over the year in certain key submarkets, far outperforming many of the other markets within the country.