GLOBAL OFFICE RENT REBOUND
EMEA region follows closely, with rents turning up.
More than half of the office rental markets in Asia Pacific either stabilized or moved into the growth phase during the second quarter (Q2) of 2010, demonstrating that the region continues to lead the global real estate recovery, according to CB Richard Ellis’ (CBRE) latest quarterly Global Office Rental Cycle report.
According to the rent estimates for model buildings envisioned by the institute for each major area, rents for the Marunouchi and Otemachi areas have already fallen to a level equal to that marked at the time of the "2003 problem," when there was an excess supply of office buildings.
In particular, the rent drop for Class A buildings in central Tokyo is significantly noticeable and the difference in rent compared with smaller buildings and buildings in the surrounding areas is rapidly diminishing.
The latest report points out the possibility of rapid growth in demand for Class A buildings, which now seem to be undervalued after rent adjustments, since there has always been strong demand from tenants for Class A buildings in central Tokyo.
Nevertheless, despite the fact that the rent for Class A buildings in such areas is nearing the bottom, the report did not revise the forecast that rents for large office buildings in broader Tokyo will not bottom out until 2011, as an overall recovery of office space demand is considered to take more time.
The report states that rents for small to medium-sized buildings and buildings in the areas surrounding central Tokyo may fall in an increasingly stronger downward trend for the time being.
Tokyo,Japan The Long Road to Recovery
Vacancy peak still to come, rental revenue to hit bottom in 2011.