Natural Vacancy Rates in Global Office Markets

Ben Sanderson, Kieran Farrelly and Corin Thoday

ERES from European Real Estate Society (ERES)

Abstract: The perspective of property investors and advisors is increasingly global and the importance of accurate forecasts in assisting in decision making is well known. . This is especially the case in office markets which are arguably the most developed sector for global investors. This paper seeks to contribute to knowledge of the dynamics of global office markets with an assessment of the interaction of rental growth and vacancy rates across a sample of the worlds leading office markets. Estimates are made of the natural or non accelerating rental growth vacancy rate level at an individual city level and collectively for the three regions assessed (Europe, Asia Pacific and North America). An estimate is also made of the global natural vacancy rate. The results suggest that estimates of natural vacancy rates vary significantly across the world but these estimates can be helpful to those seeking to understand the dynamics of global office markets. The paper concludes by testing possible explanations for these differences in natural vacancy rates around the world such as lease lengths, market transparency and data measurement issues.

JEL-codes: R3 (search for similar items in EconPapers)
Date: 2005-01-01
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Persistent link: https://EconPapers.repec.org/RePEc:arz:wpaper:eres2005_305

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