Spain 
Italy 
Greece 
71% of the 59.000 M² of New Offices Have Guaranteed Occupancy
08-03-2017
Portugal continues to go against the current in the global office market, where construction is undergoing an unprecedented boom. There are only 59,000 m² of office space under construction in Portugal, 71% of which have guaranteed occupancy.
According to the Cushman & Wakefield’s latest “Global Office Forecast,” over the next 3 years the global office market will see “an unprecedented boom in new office building” with more than 65 million square feet planned for the period. According to the consultancy, this is the equivalent of the combined existing office space in the cities of Washington DC, Dallas, London, Singapore and Shanghai.
In the near future, demand and employment growth should remain stable, requiring a total of 48 million new square meters of office space, but this figure is far below the amount coming onto the market, which will increase the vacancy rate in most of the 100 cities analyzed. “Seen from this perspective, it’s obvious that we are overbuilding,” C & W notes.
Occupants clearly prefer new, high quality buildings, as is also the case in Portugal. In the US, offices like this have accounted for 65% of the new space occupied since 2012, and most real estate developers who have opted to supply prime products have ended up leasing “better and faster” even in markets with a high vacancy rates.
The Asia-Pacific region is leading new developments, concentrating 60% of new construction, especially in Beijing, Shenzen, Shanghai, Manila and Bangalore, which account for 55% of all new construction expected in Asia and 1/3 of the global total.
In Europe, there are several projects under construction, but the expected area is much smaller than in other regions. Paris, Vienna, London and Brussels expect more new buildings over the next 2 years.
In Portugal however, the resumption of the office market has not yet had the expected repercussion on development, which is at the lowest levels ever. “The level of rental income, limitations in construction financing, and the competition of residential developments have limited office development in Portugal.”
The consultancy also explained that “many developers continue to choose to ensure guaranteed occupation of their projects – among the 59,000 m² of new office space under construction, 71% are guaranteed occupancy – but the potential market demand, particularly for medium and large-sized quality spaces, should lead to the emergence of new projects on the market soon.”
Original Story: Vida Imobiliária – Ana Tavares
Translation: Richard Turner