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Jones Lang LaSalle
Over the course of 2011, prime office markets around the world put in a strong performance, recording six per cent rental growth in the final quarter of the year, compared to the same three-month period in 2010. This is the finding of the latest Jones Lang LaSalle Global Office Index, which noted this was the eighth consecutive quarter of rental increases in the sector. Meanwhile, vacancy rates dropped to the lowest level in two years, standing at 13.6 per cent at the end of 2011.Director of the company's global research team Jeremy Kelly commented: "The majority of global leasing markets are holding firm, and many are showing remarkable resilience, especially among the BRIC (Brazil, Russia, India and China) countries, as well as robust showings from Canada, Australia, Germany and the Nordics." The organisation went on to predict that rental markets will remain steady during 2012, with many major office markets around the globe expected to experience "positive rental growth". Cities to watch in particular include Beijing, Toronto and San Francisco, where double-digit rises are anticipated by the end of this year.Jones Lang LaSalle also highlighted the relative strength of commercial real estate investments in comparison to other asset classes that haven't fared so well in this period of economic uncertainty, adding that investors are "already wise to the resilient fundamentals" of this sector. However, the firm pointed to falling business confidence in Europe that may result in lower returns from offices this year, especially if a solution to the eurozone sovereign debt crisis is not forthcoming. That said, there are some prime office markets to keep an eye on this year, including those in Germany. The company noted Berlin and Dusseldorf posted some of the biggest rental increases in the final quarter of 2011 - at 2.4 per cent and 2.1 per cent respectively.A recent publication from BNP Paribas Real Estate looking at Western European office markets made a similar observation, predicting that Germany will be the "strongest euro-area performer" in the first half of 2012. Vacancy rates in all four of its major cities - Munich, Berlin, Hamburg and Frankfurt - fell on both a quarterly and an annual basis in the three months from October to December last year, while the average cost of renting office premises in prime districts also climbed in each of these markets year-on-year.
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