Savills said data from all 54 cities across Asia, Europe, the United States and Australia showed that Hanoi was leading with a yield of 8.75%, followed by Ho Chi Minh City with 8.5% yield.
Taipei ranked at the bottom of the table with the lowest office yields, nearly 2%, Hong Kong was just above with 2.5%.According to the latest World Office Yield Spectrum report from Savills and Deakin University of Australia, the average decline in yields across 11 gateway cities since December 2014 was 95 basis points. San Francisco witnessed a significant reduction (32%) from nearly 7% to 4.64%. Whereas, in Shanghai and West Los Angeles, the rates were trivially reduced to 0.29% and 0.31%.Of these big cities, Sydney led with the most attractive yield, 5.37%. Followed by western markets Los Angeles and San Francisco, which were the only cities with yields above 4.50%.Savills said data from all 54 cities across Asia, Europe, the United States and Australia showed that Hanoi was leading with a yield of 8.75%, followed by Ho Chi Minh City with 8.5% yield.
Taipei ranked at the bottom of the table with the lowest office yields, nearly 2%, Hong Kong was just above with 2.5%.Mr. Tony Crabb, Head of Research at Savills in Australia, said: the office market is generally expected to continue to receive strong capital inflows. This is a market that is favored by investors, now due to the influence of economic and political factors, it has become a safe investment option and more attractive to investors.“This is an interesting time in the investment cycle, as the market has reacted to the form of inflation/growth trade by boosting bond yields and growth stocks and noted that the office market will perform well when demand increases” said Mr. Crabb.He shared that with the current situation most markets still exist economic and political instability, it can be said that the office investment market will continue to bring good investment value, so it attracts more demand, and in some cases reduces yields.“Much of what is going to happen in 2017 and beyond will depend on the decisions of the US Federal Reserve System for interest rates and policies that the new president will set up.”“These factors, along with the Brexit talks and election activity in other major European countries, will be key factors in determining the fluctuations of currency, trade flows and capital movements in the world.” Mr. Crabb said.He added that if there are any obstacles to investing in the office market, there will be a shortage of supply in most gateway cities, which have received huge amounts of investment capital, some places at record levels, in recent years.“Supply shortages are exacerbated by the strength of the rental market, especially in gateway cities, reducing vacancy and reducing the growth rate of rents, and investors are still happily accepting this fact” Mr.Crabb emphasized.
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