Steady improvement in both leasing activity and corporate sentiment is supporting a moderate uplift in prime office rents. The JLL Global Office Index, which tracks the performance of prime office space in 95 major markets, reveals that rents grew by 2.2% in the year to Q2 2014, representing the strongest annual growth for two years. Nearly 60% of markets have recorded rental uplifts over the past year.
Momentum is expected to continue to build during 2014 and 2015 as shortages of quality office space in the world’s dominant office markets intensify. The recent uptick in new construction marks the start of a new development cycle, but it will not translate into deliverable space until late 2015 and 2016, leaving a period of 15-18 months of Grade-A supply shortages and rental growth.