RCA Insights

Top 15 Global Office Markets Chart Different Paths

By on November 26th, 2019

Offices, in aggregate, remain the number one choice for property investors around the world. So far in 2019, more than $279 billion has been spent on office properties, which is $90 billion more than has been spent on apartments, the next most popular sector.

However, as a percentage of total market activity (excluding land sales), the share of the office sector has been falling. It peaked at 46% in 2009 and has since dropped to 36%. The corollary of this trend is the increased interest in the apartment sector and the industrial market, which have both grown in response to structural changes in how people shop and live.

Paris is the world’s number one office market so far in 2019, a consequence of the Brexit-induced slowdown in London and a relatively sluggish year for New York. (This analysis examines deals $10 million and greater.)

Investors spent $15.2 billion on Paris offices in the first nine months of 2019 and for the first time since 2007 more investment came from overseas than from domestic players. In the U.S., San Francisco has overtaken New York as the largest office market. San Francisco’s tech-driven economy has powered the sale of large office buildings this year.

Many of the world’s office markets are showing a retreat in deal volume. However, most are still recording growth in price per unit as the shortage of suitable stock, a lack of forced disposals and plentiful capital means any assets coming to market are attracting good sale prices. The major exceptions are London and Hong Kong, where prices were weaker in the third quarter of 2019 than a year prior.


Additional data analysis by Aamash Haroon

A version of this article first appeared in Global Capital Trends, released November 6. To learn more about the RCA Hedonic Series of cap rate and price-per-unit data sets contact us. If you are an RCA client you can access these data series on TrendTracker and via the Standardized Downloads. 

Also on RCA Insights:

Global Commercial Property Activity Retreats in Q3

Europe Regains Some Momentum; France Shines

Simon Mallinson

Executive Managing Director, EMEA & APAC

Simon Mallinson joined Real Capital Analytics in January 2013. Based in London, Simon has board level responsibility for EMEA and APAC, with a particular passion for the continued development of RCA’s industry-leading client service and capital markets analytics.

Previously, Simon was Senior Director leading European Research at Invesco Real Estate. Prior to Invesco, Simon held a number of roles with IPD (now part of MSCI) in London and the United States. As Head of US Services, based in Chicago, he established IPD’s first North American office.

Simon is a Board Member of US association NCREIF, a member of RICS and is active across a number of other global real estate associations. He holds degrees from both Leeds and Manchester University, UK. Simon has set foot in 48 U.S. states and is looking for an excuse to visit Maine and Alaska.