Prime rents in dubai lead global increase
Overall rental rates edged up 0.2 per cent in the first three months of the year and rose 3.8 per cent in the 12 months to the end of the first quarter - the 15th consecutive quarterly increase and 20.3 per cent above the all-time low recorded in the Q2 2009.
But while the overall figure is positive, Dubai drives most of that growth, covering up falls in Hong Kong, New York and London, where rents fell 2.3 per cent, 2.6 per cent and 3.1 per cent respectively.
On a regional basis, the Middle East saw the strongest rise in prime rents (up 13.1%) and North America the weakest (down 0.7%)
Prime rents in key cities worldwide rose by 0.2% in the first quarter of 2013, the index’s lowest rate of quarterly growth since late 2009.
Kate Everett-Allen comments: “Prime rents are rising strongly in many emerging markets, but this growth is being overshadowed by weakening rents in some of the world’s more established financial centres such as Hong Kong, New York and London.
“Luxury property for rent in Dubai, Nairobi and Beijing rose by 18.3%, 13.9% and 12.3% respectively in the year to March.
“By comparison, Hong Kong, New York and London saw prime rents fall by 2.3%, 2.6% and 3.1% over the same period. In this second group of cities, the rental markets have suffered as relocation budgets for executives have been trimmed during a period of weaker financial sector performance.
“Despite the slower rate of growth this quarter, the index, which tracks the performance of luxury lettings markets worldwide and which is increasingly influenced by corporate and expatriate demand, has now risen for 15 consecutive quarters and stands 20.3% above its low in Q2 2009.
“Global mobility is on the rise as companies look to plug their skills gap but the latest figures suggest it is increasingly a west to east shift with many multinationals relocating a growing portion of their key talent to growth markets in Africa, China and the Middle East.
“A regional breakdown of rental performance confirms this trend. The Middle East, Africa and Asia saw average growth of 13.1%, 7.0% and 3.1% respectively in the year to March.
“Prime rents in Europe and North America fared less well, recording average growth of 0.9% and -0.7%. Here, salaries are failing to keep pace with inflation and the economic recovery remains in a fragile state.
“With the US jobs market picking up and tentative signs of improving business sentiment in the Eurozone we may see rents strengthen in New York and potentially London in the second half of 2013. However, we expect the emerging markets to continue to top the rankings as established industries in Europe and the US look to tap world markets.”