Global Office Rent Tracker

Despite headwinds from the war in Ukraine and rising inflation, global office markets had a strong start to the year in Q1. Prime office rents grew in several key global markets, reflecting strengthening demand and leasing activity. This recovery, coupled with occupiers’ sustained flight to quality, continues to lower availability of prime office space. 

In EMEA, prime rents increased in several major markets in Q1 2022, driven by a 30% increase in office leasing activity from a year ago. Madrid and Milan had particularly strong growth in leasing activity and prime rents. The region’s office market recovery was partly due to more workers returning to offices as COVID restrictions were eased. This has led occupiers to seek high-quality office buildings to attract more workers. As a result, prime rents increased in many markets in Q1, such as Berlin and Birmingham, and this trend is expected to continue throughout 2022. 

In the Americas, prime rents increased in 25 of the 33 main office markets tracked by CBRE in Q1 2022, driven by increased leasing activity and robust office-using job growth. The flight-to-quality trend among office occupiers continued. Chicago (+15.6%), Denver (+13.6%) and Seattle (+12.7%) led the region’s major markets for year-over-year prime rent growth in Q1. The biggest declines occurred in Calgary and Los Angeles. Positive absorption continued in the U.S. for a second consecutive quarter, after six consecutive quarters of negative demand. As more occupiers return to the office, demand is expected to strengthen throughout the year.

In APAC, leasing volume held steady in Q1 2022 and prime office rents registered their first quarterly growth since the onset of the pandemic. Office demand continued to be led by flight-to-quality, while demand from flex operators continued to recover. Most leasing deals in mainland China were rollover transactions from the end of last year that were closed in January. Occupier sentiment on the mainland weakened substantially at the end of the quarter after COVID lockdown measures.

Most new projects currently under construction in APAC are scheduled to deliver this year, although the rapid rise in construction material costs could delay some of them. Leasing volume in Q2 2022 is expected to moderate as lockdowns in some Chinese cities continue, particularly in Shanghai and Beijing. Coupled with less availability of prime space in several markets and potential delays of new supply, full-year leasing volume growth for the region is expected to be moderate.

Y-on-Y change (%), Q1 2022 vs Q1 2021