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Office occupiers 'remain cautious around the world'

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Office occupiers 'remain cautious around the world

The global economic crisis has profoundly affected many industries, forcing lots of businesses to adopt new approaches in order to survive and expand.

While the financial slump is not yet over, some will argue that the worst has now passed. With that in mind, it is interesting to look at sentiment among businesses around the world, particularly those that operate internationally.

One way of measuring confidence among companies is to look at the office space market in key locations. A high take-up of commercial premises in a city can be a reflection of confidence in its wider economy, which could indicate where the next hotspot of international money transfer activity is likely to be.

According to Matthew Colbourne, a senior international research analyst at Knight Frank, office occupiers around the world are quite cautious at the moment.

The continuing debt crisis in the eurozone was said to be fuelling these concerns, along with the ongoing uncertainty regarding the global economy.

Mr Colbourne commented: "The pace of prime office rental growth in Europe slowed significantly in the second half of 2011, with rents remaining essentially flat in markets such as London and Frankfurt."

However, some markets have managed to buck the trend, as Hong Kong for instance saw rental growth go up at a very fast rate during the first six months of last year. Indeed, a 28 per cent upturn was recorded in this particular location.

While this did drop off in the second half of 2011, it was enough to ensure the city had the world's highest prime office rents throughout the year as a whole. This put it ahead of the West End area of London.

Mr Colbourne noted that Hong Kong is particularly reliant on "demand from international financial occupiers", adding that the fortunes of cities in Asia have been "mixed" in recent times.

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