Savills plc

11/30/2020 | Press release | Distributed by Public on 11/30/2020 03:56

Savills forecasts prospects for office occupation in key global cities in 2021

Savills views are based on the expert opinions of their head researchers in 10 key office markets around the word (Berlin, Dubai, London, Hong Kong, Paris, Mumbai, New York, San Francisco, Shanghai, Singapore) surveyed as part of its Impacts Research programme.

In every city apart from Shanghai, Savills says that incentives are very likely to increase over the next six months; China's most populous city has already seen incentives significantly increase in recent quarters and therefore they are now expected to remain the same for the short to medium-term. Looking ahead to future incentives, seven out of 10 cities expect more landlords to offer even more flexible lease terms later in 2021. Only Berlin, Hong Kong and Shanghai expect the proportion of landlords offering these terms to stay the same.

For a city-by-city breakdown of Savills views see here

Sophie Chick, Director, Savills World Research, comments: 'The views of our researchers around the globe confirm, unsurprisingly, that momentum lies with tenants at the moment with good incentives on offer across the vast majority of markets, and most landlords being prepared to be flexible. However, this shouldn't be taken as a sign that tenants will be able to set all the terms: for the best space, rents remain robust and, with many key CBD markets already seeing record low vacancy rates as we came into 2020, competition for high-quality, well-located offices remains fierce.'

Jeremy Bates, head of occupational markets EMEA, Savills, adds: 'Whilst there will inevitably be flexibility from landlords over the short to medium term, this is likely to be more of a window than a long-term trend and we would expect more equilibrium to return as markets begin to recover, which with the development of a vaccine may come mid-2021. Tenants should also remember that incentives are not just about rents and can come in different forms, so it is worth having broader discussions over what can be negotiated once you find your preferred space, rather than concentrating on the headline numbers.'