JLL Reveals Top Ten Global Office Locations With Strongest Rental Growth in Past Year

CHICAGO, IL and LONDON, UNITED KINGDOM and SINGAPORE--(Marketwired - Aug 9, 2016) - (NYSE: JLL) Oakland East Bay, Stockholm, Dublin and Dubai (DIFC) took the top spots for annual office rental growth, according to JLL's latest Global Office Index. All four cities saw growth of 20 percent or more, with Oakland East Bay reaching 35.4 percent and topping the ranking. Cairo came in at sixth place with growth of 16.7 percent, whilst Asia Pacific was represented by Sydney in fifth place with 17.1 percent growth and Hong Kong in at tenth position with 11.1 percent. Apart from Oakland East Bay, three other U.S. cities were featured in the top ten: Los Angeles (seventh), Atlanta (eighth) and Austin (ninth) showing 13.5 percent, 13 percent and 12.1 percent growth respectively.

Rents on prime office assets across the 110 major markets covered by the JLL Global Office Index increased by 3.6 percent year on year in Q2 2016, the fastest pace of annual growth in four years. Rents rose by 0.8 percent in Q2 2016 compared to 0.6 percent in the previous quarter. 

Jeremy Kelly, Director, Global Research Programs at JLL, said: "Global office demand is proving resilient in many of the world's dominant commercial real estate markets, despite increased political and economic uncertainty that is leading to corporate occupiers striking a more cautious tone. Office supply continues to tighten on the back of a shallow development cycle, and this is creating continued upward momentum in aggregate rental growth." 

The Americas Office Index accelerated in Q2 2016 with prime office rents in the region rising by 0.6 percent quarter-on-quarter, up from 0.2 percent in Q1. This remains a slower pace of growth than that experienced in the second half of 2015, with growth in some of the previously fastest-surging markets, such as San Francisco and Silicon Valley, decelerating from unsustainable levels seen earlier in the cycle. Nonetheless, the cyclical expansion in the U.S. remains firmly in place as landlords in the vast majority of cities enjoy market leverage over tenants, and this is expected to continue to be the case into 2017. The Americas Office Index has now gained 20.1 percent since the cyclical trough in early 2010 and the new record level as of Q2 2016 is 3.6 percent higher than the previous cycle's peak in 2008.