Office take-up in the top six office markets totalled almost 800,000 sq m in the first quarter of 2016, surpassing the very strong corresponding quarter last year (Graph 1).
Although this result may initially appear unsurprising in view of the rising population and employment figures as well as the growing economy, the situation is far from straightforward. While office demand is rising in all six markets, the currently
very scarce supply is beginning to stifle growth.
The vacancy rate in the first three months of the year fell by an average of 30 basis points across the six markets to 6.5% (Table 1). In view of the foreseeable urban growth combined with the continuing low completion volume in the office sector (Graph 5), vacancy rates should continue to decline. In central locations of some cities, there is scarcely any available space even at present, which explains why such locations’ share of take-up has long been in decline (Graph 4).
Source : Savills