According to Savills, the rental rates for prime office space, which is considered the top tier of Class A offices and typically falls within the top 5% to 10%, are now averaging 31.4% higher than those for all Class A offices in global markets. North America has the highest premium at a staggering 62.5% above average Class A rents, led by Midtown Manhattan.
Savills attributes this intense bifurcation in commercial real estate market in the US and Canada to high demand for prime buildings from occupiers, resulting in such a significant premium that is expected to continue growing. In comparison, APAC has a prime premium of 33.7%, while EMEA has a much lower regional price premium of only 17.9%.
In terms of occupier demand around the world, Savills reports that during first half of2024,the majority (94%)of large occupiers either expanded or renewed their current square footage insteadof downsizing.The trend towards expansion or renewal indicates continued confidence and growth among these companies.
Overall,the data shows thatprime office rents are outpacingClassArentsby more than30%. This highlightsthe strong appealand value placed onthesehigh-endoffice spacesin today’sglobalcommercialreal estatemarket.
