Toronto Office Nears Completion
At far right, Bay Adelaide Centre West, a 1.2-million-sf office tower in Toronto’s financial district, is the first major CBD development in 17 years. Designed by WZMH Partners, the 51-story Leadership in Energy and Environmental Design Gold-certified building is 73 percent pre-leased.
Overall Vacancy and Rent Stats, Primary Markets, 2Q09
Market,vacancy (%),rent per month ($PSF)
Source: Cushman & Wakefield
Retail Corridor Rents
Corridor,1Q09 ($PSF),1Q08 ($PSF)
Champs Elysees, Paris,1,203,1,468
Fifth Ave., New York,1,400,1,650
Ste. Catherine Street, Montreal,240,300
Source: Colliers International
Office Markets to Watch
Moscow — In 2Q09, approximately 65 percent of Moscow office space commissioned during the previous two quarters remained vacant, reports GVA Sawyer. During the same period, corporate belt-tightening resulted in growth of the office sublease market to 160,000 sm of available space. If Russia’s economy begins to rebound in 3Q09, sublease activity should slow and office rents could increase up to 10 percent by 2Q10.
Singapore — Singapore’s industrial vacancy reached 13 percent in 2Q09, according to Cushman & Wakefield. In addition, concerns about an impending supply influx drove rents down to $2.93 psf per month in 2Q09 from $3.21 psf per month in 1Q09. And though rents are expected to decline through 4Q09, businesses continue to value Singapore as a regional hub. In 2Q09, an undisclosed Fortune 500 corporation and Singtel awarded contracts for the design, construction, and leasing of two industrial properties totaling 861,900 sf.
Big Deal Boosts London Market
In June, Friary Court, a 6,942-sm office building in London’s financial district, was sold to HIH Global Invest for £42.6 million ($68.8 million USD). The transaction netted a 6.95 percent purchase yield rate, exceeding the long-term average for London’s CBD by more than 1.4 percentage points. Built in 1984, the property is 100 percent leased to Holman Fenwick Willan LLP for 15 years.
Office Forecast: Eastern Europe
Looking ahead to 2010 and beyond, Prague, Czech Republic, Warsaw, Poland, and Hamburg, Germany, will be Europe’s most attractive office markets, according to Feri EuroRating Services. Economic growth in these cities is forecast to outpace the rest of the continent, resulting in an influx of white-collar jobs. Rental rates in Prague and Warsaw, which have been relatively stable through the downturn, are expected to resume a steady increase next year. Hamburg’s recovery will not be quite as swift, but as a major logistics hub its eventual upturn is expected to be stronger than most European markets.