In the third quarter, Asia Pacific experienced the highest rate of global office rental growth, with Silicon Valley rates increasing by 14%.

Despite companies delaying real estate decisions and renewed pressure to push down costs in the face of economic uncertainty in Europe and the United States, prime office rents in 81 global markets rose by 1.1 percent in the third quarter of 2011, according to Jones Lang LaSalle’s latest Global Office Index. doha property finder

Quarter-on-quarter, Asia Pacific office markets saw the fastest rental growth of 2.5 percent. In the third quarter, the Americas saw a 1.1 percent rise. However, investor worries about Europe’s economy have weighed on stocks, and growth in that area has slowed to a halt, dropping from 2.1 percent in Q2 to 0 percent in Q3.

According to the firm’s latest Index, prime rents have risen for the seventh consecutive year, representing an 8.2 percent increase since the market bottomed in the fourth quarter of 2009 and a 5.5 percent increase year-over-year.

In the third quarter, office rents increased in most Asian markets, though at a slower pace than in previous quarters. In 18 of the 27 featured office markets, net effective rents increased; in the remaining markets, rents either stabilized or experienced minor residual declines. Rental growth was relatively unchanged from the previous quarter, with an average quarter-on-quarter rise of 2.5 percent across the country, as stronger growth in some Australian cities offset weaker behavior in Asia. The quarterly rental increase averaged 2.4 percent in Q2.

In the third quarter of the Global Office Index, seven of the ten cities were in Asia Pacific, two in South America, and one in the United States.

Dr. Jane Murray, Jones Lang LaSalle’s Asia Pacific Head of Research, tells the World Property Channel, “The picture is varied across Asia Pacific, reflecting differences in market conditions in terms of occupier demand, available stock, landlord expectations, and local economic drivers. In the short term, we expect rents to rise in most markets, while Hong Kong and Singapore may see some softening due to their greater exposure to global economic conditions, and a few other laggards are likely to see either no growth or residual rental declines. Rental increases of up to 25% are expected across the area in 2012, with the highest increases expected in markets like Beijing and Jakarta.”

Real estate markets are diverging, with emerging markets in the BRIC economies demonstrating good year-over-year growth, with rises in Beijing (+50.6 percent), Moscow (+41.2 percent), Shanghai (+23.7 percent), and Sao Paulo (+20.4 percent), according to Jones Lang LaSalle’s Global Office Index. Jakarta (+48%), Hong Kong (+20.6%), and Manila (+20.9%) were among the other Asia Pacific markets that saw positive growth.

Silicon Valley (+60%), Bangalore (+19.7%), and San Francisco (+17.1%) all had good rental results due to the global technology sector’s continued power. Demand from the commodities sector also contributed to Perth’s solid year-on-year growth (+26.9%).

Jeremy Kelly, Director in Jones Lang LaSalle’s Global Research team and author of the firm’s recently published Global Market Perspective, commented on the year ahead: “During 2012, we expect positive rental growth in the major prime office markets. Most global markets are projected to rise in the single digits, with some, such as Beijing, Tokyo, San Francisco, and Toronto, poised to outperform in 2012.”

He continued, “Despite signs of a slowdown in office leasing activity in major international business centers, the global average office vacancy rate of 13.8 percent is now at its lowest level in two years. The prime leasing markets in advanced economies are reasonably tight, with a relatively small supply pipeline. In this context, we believe markets are well positioned to resume their upward trend once interest returns.”