Demand For Office Space Still Largely Absent
Despite the global economy showing signs of growth, office markets around the world recorded another six-month period of relative weakness. Most regions of the world remain marred by little demand for office space with leasing activity remaining sub-par. In particular, the United States and much of Europe chalked up another six-month period of weak tenant demand while Latin America and much of Asia Pacific were beginning to show the first signs of growth. All regions again reported higher vacancies and falling rents; however, relative to the first half of 2009, changes in vacancy and rental rates were modest. In contrast to sluggish leasing conditions, office investment sales activity in the second half of 2009 was up in all regions, suggesting investors see a firming in market fundamentals in the not-so-distant future. The outlook for 2010 is for a further weakening in fundamentals, but by year-end most regions are expected to show signs of growth, albeit tentative.