Five trends shaping the world’s most expensive citiesFindings from JLL’s Premium Office Rent Tracker November 2016

Globalization and city competition

We’re in a new era of city competition, where cities are fighting to secure the world’s most dynamic corporations, attract the best talent and pull in footloose capital. Increasingly, commercial real estate is playing a pivotal role in this battle as the combined forces of globalization and technological disruption reshape the world’s urban hierarchy and urban form.

JLL’s Premium Office Rent Tracker provides a snapshot of the rarefied world of the premium office market. It provides a useful barometer of relative city attraction and highlights the intense strains that many cities are now facing as their real estate markets try to accommodate growth.

Our latest release uncovered five key trends that are shaping the future of these markets.

Corporate demand for premium office buildings in the world’s most prestigious commercial office districts continues to outstrip supply, serving to push up occupancy costs in several premium office markets.Double-digit increases registered in Boston, Los Angeles, Sydney, Hong Kong, Washington, DC, Madrid and New York.

Trend #1

Despite rising occupancy costs, there is mounting evidence that the premium segment is moving into a late-cycle phase, with upward pressure abating as markets move more into balance.

Trend #2

Shortages of premium space continue to characterize many of the global gateway cities.

In general, vacancy rates in these premium markets are below five percent and in some gateway markets they are lower than two percent. Vacancy rates are detailed in the full report.

Trend #3

Traditionally, premium office space has been the domain of high-value, high-margin businesses in financial services, professional services and high-end fashion/luxury goods.

Recently, more tenants from the technology sector are targeting premium buildings to attract top talent and enhance their brand equity.

Trend #4

Affordability is a concern in many cities.

To remain competitive, the top global cities will need to execute bold urban transformation projects to ensure a supply of appropriately priced and flexible commercial space.

View the full report for a ranking of the most expensive markets.

Trend #5

Read more about these trends and see which cities are impacted in JLL’s latest release of the

Premium Office Rent Tracker.

This tool offers like-for-like comparison of premium occupancy costs across 35 global markets and ranks the world’s most expensive space.

www.jll.com/premiumrents Learn more