HONG KONG-Asia will, by far, lead the rest of the world in new office development next year, and likely for the next decade, according to CB Richard Ellis. In its report “Global Office Development Cycle: Where Are We Now?” the company predicts that only Asia among the four major global regions — Asia, Western Europe, North America, and the Pacific — will witness significant growth in office completions in 2010 and 2011.
Of the 293 million square feet of office expected to be completed in the next two years, about 65% will be in Asia, according to the report. About 24% of the rest will be in Western Europe, while only 8% will be in North America. About 4% will take place in Australia and New Zealand.
Looking forward into the teen years of 2000, Asia will dominate in office construction, says Ray Torto, global chief economist with the company. “We’ll continue to see disparate numbers. They’ll continue to run solid like a young person, and we’ll move forward like we’re middle aged,” Torto tells GlobeSt.com.
Development matches GDP growth, and Asia is showing that it is investing in its commercial real estate, Torto says. This is in turn attracting business from around the world. “We’re seeing companies moving over there every day. In China, India and Indonesia, that’s the biggest growing consumer market. And they don’t bicker about tax cuts. I don’t advocate their style of government, but it does let them make responsive changes quickly to their economy,” he says.
Asian office development has fully resumed its growth after slowing only slightly for the global recession, according to the report, and is on track to push completions about 50% higher than the annual average of 42.2 million square feet. Western Europe is on track for a 30% drop over its annual average of 32.9 million square feet of new office development, and North America will likely see a 70% drop from an average 25.9 million square feet.
Torto says the US shouldn’t be too alarmed at moving into third place in new development. “I remember talking to someone from the United Kingdom recently about how the United States took over the mantle from Europe as having the fastest growth at the turn of the 20th century,” Torto says. “Europe moved into second place for most of the century, but they still had it good in Europe, it’s not like Europe collapsed.”