According to the study of the consultancy firm Cushman & Wakefield London’s West End is the world’s most expensive office market for the third consecutive year. To rent one metre squared of office space here costs over EUR 2,300 annually. Hong Kong came second place (EUR 1,636 sq m/annually) followed by New York third (EUR 1,162 sq m/annually).
The SEE region offers investment possibilities across such countries as Serbia, Croatia and Romania with the office and industrial sectors providing potentially higher returns with increased risk than the more established but increasingly competitive markets in Central and Western Europe. Although one of the major obstacles to investment market development is the limited supply of office and industrial investment grade product despite tenant demand.
With GDP growth of 2.6 percent predicted for 2014 the Czech Republic is successfully recovering from the market downturn of the last two to three years with a substantial pipeline in the Prague office market, although concerns have been expressed with regard to rising vacancy. Take up in the industrial sector is increasing across the country as leading developers are opting for a more cautious built-to-suit development model. A new benchmark in investment volume is predicted as the upward trend is expected to continue with office transactions in Prague and retail and industrial deals across the country anticipated. Concerns have been expressed with regard to the limited supply of investment grade product to meet growing investor demand.
Total modern office stock in Prague decreased by the end of the first quarter of 2014 and stood at 2.9 mln sqm with class ‘A’ properties accounting for app. 72 pct of the stock, according to the Prague Research Forum.
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