GLOBAL CITIES THE 2016 REPORT - THE FUTURE OF REAL ESTATE IN THE WORLD'S LEADING CITIES - Global Cities 2016 | Knight Frank
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G LO BA L CITIE S
THE 2016 REPORT
GLOBAL
CITIES THE 2016 REPORT
THE FUTURE OF REAL ESTATE IN
THE WORLD’S LEADING CITIES
KNIGHTFRANK.COM/GLOBALCITIES
NGKF.COM/GLOBALCITIES
GL OBA L CI T I E S R E P ORT 2 016
380
THE NUMBER OF NEW CITY DWELLERS
GLOBALLY IN THE NEXT FIVE YEARS.
THE EQUIVALENT OF THREE TIMES
THE POPULATION OF JAPAN MILLION
GL OBA L CI T I E S R E P ORT 2 016
TRAINS, PLANES
04
05
AND GLOBAL CITIES
Rapid population growth and infrastructure projects
will create opportunities in cities around the world
The UN is forecasting the world’s awash with cranes as airports, high
cities to increase in population by 380 speed railways, underground railways,
million people in the next five years. port facilities, and power stations are
Consequently, the planet will need to build being constructed. Cities like Mumbai
the equivalent of five cities the size of Los and São Paulo are playing catch-up,
Angeles every year between now and 2020, bringing in the infrastructure to match
and all the supporting infrastructure. the rapid population growth. Mature
The development potential of this rapid centres like Paris and London, having
urbanisation is huge, offering considerable reversed population decline in the past
opportunities to firms and investors that are laying new rail lines in anticipation of
operate globally. swelling future numbers of commuters
and tourists. Places like Dubai and Beijing
Knight Frank and Newmark Grubb Knight
JOHN SNOW are developing mega airports in order to
Frank would like to brief you on what this
Head of Commercial, Knight Frank maintain the momentum behind their
will mean for your business. Consequently,
commercial success.
we have asked our researchers around the
globe, from Los Angeles to Delhi, from Whatever the reasons behind the new
São Paulo to Beijing, to draw together a wave of infrastructure projects, they
comprehensive outlook for real estate in will reshape the Global Cities. New
21 of the leading business cities. This is business districts will emerge, creating
gentrification in former industrial
Global Cities: The 2016 Report.
districts, and in turn necessitating the
We also this year include a Watch List of development of new homes, shopping
five cities we believe are set to play a bigger centres, leisure facilities, and offices. All
role in the global business community in this will be underpinned by an advanced
the coming years. These up and coming logistics system, which starts at the factory
centres range from Nairobi in Kenya, gate on one continent and ends with a
which demonstrates Africa’s rapid home delivery thousands of miles away.
modernisation, to Dubai in the U.A.E., Real estate will play an essential part in
which has pulled clear of past difficulties all of this, and Global Cities: The 2016
and is expanding as a hub for investment, Report aims to brief you on where the
JAMES D. KUHN
tourism and transport. opportunities are to be found. We hope
President,
Newmark Grubb Knight Frank The cities covered by this report are very this study will be a useful tool to assist with
different in character, but a common your business planning for 2016. Feel free
theme among them is new infrastructure to contact either of us should you wish to
development. The Global Cities are discuss the report’s conclusions further.
Tokyo, Japan
GL OBA L CI T I E S R E P ORT 2 016
06
07
CONTENTS
SUPER CITIES
40 - 41 GLOBAL CITIES
08 - 11 The Super Cities Retail: All The 50 - 52 Asia Dashboard
A new global economic cycle is fuelling the expansion of World’s A Stage
53 Mumbai
cities. Which centres will benefit the most?
54 Delhi
12 Skyscraper Index
Which is the most expensive city in the world to rent an 55 Bengaluru
office that has a helicopter view? 56 Shanghai
13 - 15 Five Global Infrastructure Projects 57 Beijing
Across the world, the development of rail lines, seaports,
and airports, looks set to create new business hubs. 58 - 59 Australia Dashboard
26 - 30 08 - 11
60 Sydney
GATEWAY CITIES 61 Melbourne
Future Offices: The Super Cities
16 - 17 New York City Breaking The Mould 62 Tokyo
18 - 19 Singapore 63 - 65 U.S. Dashboard
20 - 21 London 66 San Francisco
22 - 23 Hong Kong 67 Los Angeles
24 - 25 Paris 68 Washington, DC
48 - 49 69 Chicago
GLOBAL OCCUPIERS Architecture Of 70 Mexico City
Inclusivity
26 - 30 Future Offices: Breaking The Mould 71 São Paulo
The office is being transformed beyond recognition as firms 72 - 73 Europe Dashboard
strive to create an inspiring workplace.
74 Frankfurt
31 Crowd Working
75 Madrid
Collaborative offices are rising fast around the world as the
number of start-ups mushrooms.
32 - 33 The Sydney Office WATCH LIST
Sydney is a trailblazer for activity-based working, where
sofas are making desks redundant. 76 - 77 Dubai
78 Kuala Lumpur
GLOBAL CAPITAL MARKETS
79 Bangkok
34 - 38 Five Future Trends In Capital Markets
From specialist property, to short income assets, to mixed-
use; here are five opportunities in real estate investment.
42 - 47 80
81
Nairobi
Moscow
Flexible Living
39 Global Megatrends
Mike Sales, CEO of TH Real Estate, looks at the seismic POST SCRIPT
changes in the global property market.
40 - 41 Retail: All The World’s A Stage 82 About The Group
More retailers are looking to expand abroad, and must learn
83 Contributors and Important Notice
the dynamics of new real estate markets.
RESIDENTIAL GLOSSARY
42 - 47 Flexible Living
ABW: Activity-Based Working
With more people living away from home for long periods
of time, the need for flexible apartments is growing. Bn: Billions
CBD: Central Business District
FEATURE INTERVIEW GDP: Gross Domestic Product
GFC: Global Financial Crisis
48 - 49 Architecture Of Inclusivity LHS: Left Hand Scale
Architect, Zaha Hadid, discusses how architects can help M: Millions
build an inclusive modern city.
PSF: Per Square Foot
RHS: Right Hand Scale
34 - 38 Sq ft:
TAMI:
Square Feet
Technology, Advertising, Media & Information
Five Future Trends
In Capital Markets TMT: Technology, Media and Telecoms
See important notice at the end of this report
SU PE R CI T I E S
09
08
The Global Cities are about to see huge growth,
and their real estate markets need to be ready for
new waves of citizens, firms and global investors
WRITTEN BY
James Roberts,
Chief Economist, Knight Frank
The UN is forecasting the global urban Expansion for the newer emerging market
population to grow by 380 million people cities will probably be funded by local
by 2020, which if correct means demand investors. International investment is more
for city real estate is about to surge. The likely to look at either established centres
development potential of this forecast or the emerging cities that have moved into
growth is huge, when one considers all the the global league, like Beijing or Bengaluru.
new homes, offices, shops, logistics centres This is not to say the developing world
and infrastructure projects that such rapid does not offer opportunities. There
expansion would necessitate. can be the opportunity to exploit
Cities in high-income countries are transformational change if rapid growth
projected to rise in population by 34 is well managed. Indeed, on satellite
million by 2020, the equivalent of three maps there is now an identifiable super
cities the size of Paris. City populations in city along China’s Pearl River delta,
middle-income countries are forecast to encompassing Hong Kong, Shenzhen,
increase by 290 million people over the Guangzhou and Macao, that is home
same period, which is about 12 cities the to an estimated 120 million people.
size of Shanghai. With the UN predicting China’s urban
population to grow by 95 million by 2020,
THE INVESTOR’S DILEMMA more super cities will appear. Similarly,
The dilemma faced by today’s global real Indian government policy is pushing an
estate investor is whether to buy into ‘industrial corridor’ between Mumbai
the slower growth established cities in and Delhi.
the high-income countries, or the faster Therefore, we expect property
growing but riskier emerging markets. investors to seek a balance of growth
While the rapid growth in emerging and diversification in a global
markets speaks for itself, the strengths of property portfolio.
the mature cities are sometimes overlooked.
SOURCES OF CAPITAL
While Shanghai has more than twice the
population of Paris, GDP per capita is Next year, we expect two major sources
four times higher in the French capital, a of capital to be particularly active, namely
consideration when buying lifestyle-related North American money into the global
property like retail or leisure. market and opportunist domestic money
Also, rather than anyone building a ‘new in Europe.
Paris’, in wealthier countries we expect The dollar has strengthened on currency
new city dwellers to settle in existing markets, while the spread between U.S.
cities that will expand accordingly. Being real estate and bond yields has narrowed.
long-established centres, they will find Recent economic indicators suggest
international investors willing to fund that the Eurozone is through the worst,
the necessary development. In emerging and we expect U.S. capital to look to
markets, where towns can transform into exploit recovery opportunities. Current
cities in a few years, a share of the projected evidence suggests a pattern of both
growth could be in cities that are so new it direct investment and providing non-
would be ambitious for an overseas investor bank finance.
to buy there. Since 1990, an estimated
470 new cities have been established in
Asia, of which 393 were in China and India. CONTINUED ON 10-11
The Bund, Shanghai, China
SU PE R CI T I E S SU PE R CI T I E S
PRIME YIELDS - END OF 2015 FORECAST
10
12
CONTINUED FROM 08-09
to free food and yoga areas. Fit-out is is seeing multiple economic cycles set
SKYSCRAPER
We also believe more European money Regent Street,
Source: Knight Frank Research, Newmark Grubb Knight changing to match how people work, with at different stages. A diverse investment
London, U.K.
will re-enter the property market, Frank Research, Sumitomo Mitsui Trust Research Institute informal meeting areas displacing desks. portfolio, or office network in the case of
given the very low level of government the occupier, is the best way of being able
The move towards non-desk workspace is
bond yields. This has made property to catch the next rising tide.
delivering efficiency savings. In Sydney,
yields look comparatively high, which Bengaluru 10.5% a growing number of firms are no longer To exploit these opportunities, investors
is drawing buyers into the market. As a
providing desks for all their workers. This is and occupiers need to be operating in
result, in many European markets sales
volumes are picking up, and prices are Mumbai 10% based on the idea that a percentage of staff cities that have the flexibility to respond
INDEX
are not in the office at any given time, and to their changing needs. A city must have
once again rising.
non-desk work areas can cater for a fluid a dynamic labour market for the occupier
Expectations of how low property Delhi 9.5% traffic of those who come and go during the to recruit the right workers, while
investment yields can go are about to course of a day. investors need a fluid investment market
be tested, given we have seen negative to deploy funds or exit with speed.
yields for some European bonds in 2015.
Mexico City 7% In the future, rather than consisting
of rows of desks, the office could be an For both the investor and the occupier
In London, property yields have fallen
expansive series of meeting places – the Global Cities are a strong option.
below 2007 levels while still maintaining Beijing 6.3% some built around chance encounters, They offer liquidity to the investor
a healthy spread over government bonds.
others more formal or designed for quiet and wholesale access to workers and
This is because old norms on pricing have general rising tide in the global economy Also, among occupiers in the sub-20,000
been rendered obsolete by a changed prior to the GFC, today growth is patchy sq ft size bracket we are seeing more
Shanghai 6.3% concentration. Firms need to adapt customers to the occupier. Those who
to these workplace changes that can view themselves as global operators will
“LONDON RECORDED THE HIGHEST
financial landscape, and economic and good news in one geographic region office deals by firms that blur the lines improve communication, raise the quality always want a presence in the 26 cities London and San Francisco are
recovery should spread this effect to is usually counterbalanced by slowdown between technology and other industries. Melbourne 5.9% of life in the office, and save money. discussed in this report. seeing the fastest rental growth
other cities in Europe. elsewhere. Companies need to be able These are often technology-driven media
OCCUPIERS LOOK ABROAD
to redeploy capital and people around
the world according to where the next
companies, and FinTech firms that bridge
the worlds of finance and IT. Sydney 5.7%
DI V ER SI F IC ATION
A ND FLEX IBILIT Y
for high-rise offices RENTAL GROWTH - NEARLY 11%”
Just as real estate investors are looking opportunity is appearing.
The key words are now diversification
further afield for opportunities, so are Office demand is in many markets Chicago 5.4%
corporate occupiers. coming from new sources. The new wave “CITIES IN HIGH INCOME and flexibility. Both investors and
occupiers need to be able to quickly In our latest Skyscraper Index, based City Prime rent (U.S.$/sq ft/yr) Six months growth*
New patterns of economic growth since
the Global Financial Crisis (GFC) have
of technology firms that have driven the
North American and U.K. office markets COUNTRIES ARE FORECAST Washington DC 5% redeploy to wherever in the world growth
is appearing, given the global economy
on Q2 2015 data, Hong Kong retains
the title of the most expensive place
Hong Kong $255.50 1.9%
created extra pressures on companies
to operate worldwide. In contrast to the
in recent years are now setting up
outposts in Asia and continental Europe.
TO RISE IN POPULATION BY 34 Los Angeles 4.9%
in the world to rent office space in a
tower building. However, other cities
New York City
Tokyo
$153.00
$125.00
2.0%
3.4%
MILLION PEOPLE BY 2020”
Pudong district, Shanghai, China
are seeing considerably greater rental London $122.00 10.7%
growth, reflecting stronger office
OFFICE RENTS - CHANGE ON 2007 BASED ON END OF 2015 FORECAST Frankfurt 4.5% markets elsewhere in the world.
San Francisco $105.00 8.2%
Flexible offices are another growth area, Singapore $93.25 1.2%
London recorded the highest level of
Source: Knight Frank Research, Newmark Grubb Knight particularly collaborative offices. These London 4% rental growth – nearly 11% in the six
Sydney $86.50 0.7%
Frank Research, Sumitomo Mitsui Trust Research Institute operate like tech incubators, where Moscow $79.00 0.0%
BEIJING 67.9%
months to June. This is partly thanks
SAN FRANCISCO 54.0%
independent entrepreneurs work side Boston $75.00 0.0%
80% by side in a communal office. Madrid 4% to a buoyant occupier market, which
has left the vacancy rate at a 14 year Los Angeles $73.00 0.0%
70% low. Also, several high profile new Shanghai $72.75 5.3%
NO GUARANTEE OF A DESK
60%
New York City 4% tower completions have delivered
Many occupiers increasingly view offices Chicago $68.00 4.6%
space to the market capable of setting
MELBOURNE 22.6%
50% as an effective means of controlling the Beijing $67.00 -1.0%
bigger and more damaging business cost
San Francisco 4% new benchmark levels for rents.
WASHINGTON DC 8.3%
Paris $56.75 1.9%
SYDNEY 18.4%
40% Hot on the heels of London is San
LONDON 10.2%
of staff attrition. Whereas in the past an
BENGALURU 8.2%
MEXICO CITY 7.3%
Francisco, where the office market Frankfurt $53.25 0.0%
NEW YORK CITY -1.3%
30%
Singapore 3.7%
SINGAPORE -38.9%
LOS ANGELES 1.0%
office relocation was largely managed
SHANGHAI 2.8%
HONG KONG -0.2%
FRANKFURT 0.0%
continues to benefit from the city’s Mumbai $52.00 1.3%
MUMBAI -16.8%
MADRID -35.7%
CHICAGO -2.0%
TOKYO -22.2%
20% by the finance director, increasingly the
DELHI -19.0%
PARIS -8.9%
expanding technology sector. Rental Melbourne $46.25 0.0%
chief executive and the head of human
10%
resources are showing an interest, now Tokyo 3.7% growth for tower buildings exceeded
Dubai $43.50 0.0%
0% 8%, which is considerably higher than
that staff retention is featuring within the Madrid $38.50 3.3%
any other U.S. city in the study.
-10% decision making process. Paris 3.5% Taipei $37.00 0.0%
The trend is towards a workplace that Seoul $33.50 2.8%
-20%
increases staff satisfaction, with features
-30% that make the whole work experience
Hong Kong 2.9%
*Q4 2014 to Q2 2015, excluding exchange rate fluctuations. Source: Knight Frank Research, Newmark Grubb Knight
-40% more pleasurable, from games rooms Currency conversions as at 30/06/15 Frank Research, Sumitomo Mitsui Trust Research Institute
SU PE R CI T I E S
GLOBAL
WRITTEN BY
James Roberts,
SUPER
Chief Economist, 05 AIRPORTS
Knight Frank
INFRASTRUCTURE
THE DELHI–MUMBAI In Dubai, Al Maktoum International Airport, which
14
15
03
13
INDUSTRIAL CORRIDOR opened in 2010, is to be expanded from a current freight
capacity of 1 million tons of cargo per annum to
The Delhi–Mumbai Industrial Corridor (DMIC) 16 million tons. Passenger services began in 2013, and the
PROJECTS
is a development zone that will be targeted for plan is to increase to 220 million passengers a year. Dubai
investment to build up new industries to support International, the world’s busiest airport, currently handles
India’s rapid urbanisation. The project will be around 72 million passengers. Al Maktoum is part of the
partly backed by Japanese investment. The Dubai South, an economic freezone covering 56 square
transport backbone will be a freight rail line miles, which links up with the nearby Jebel Ali Port.
called the Dedicated Western Freight Corridor, Singapore’s Changi International Airport has a new fourth
With the world’s cities predicted to add 380 million which is intended to push down logistics costs in
new citizens in the next five years, new mass transit terminal under construction, which will increase the
the region. airport’s capacity to 82 million passengers a year. Also,
systems, power and utilities, and faster connections to
Along the corridor, smart cities are to be developed, as plans are being advanced for a third runway at Hong Kong
markets will be needed. Here is our choice of the mega
well as three new seaports and six airports. The city International Airport, which would allow it to handle up
infrastructure projects that will be generating new of Dholera has been declared a Special Investment to 102 million passengers.
business clusters, and creating real estate opportunities Region, with a target of tripling industrial output and
quadrupling exports in the next five years. The long-
term goal is to create a new mega city for India. IBM
and Cisco have been contracted to transform Dholera
into a smart city.
EXPANDING THE PANAMA
04 AND SUEZ CANALS
Presently ships queue up to transit the Panama
Canal, whose original locks are restricted
to ‘Panamax’ ships that carry around 5,000
containers. A new set of locks completes
construction in 2016 that will offer passage
to ‘post-Panamax’ ships that can carry up
to 13,000 containers. Port facilities around
the world are being expanded to handle
post-Panamax ships, creating development
CHINA’S GLOBAL opportunities for real estate investors.
01 RAILWAY LINKS The Suez Canal’s lane has just been doubled in
width to allow ships to sail in both directions,
China is using rail to speed up transporting freight to with plans to develop the land along its banks
Europe on routes running through Russia, or via Iran into an industrial zone. There is also more
and Turkey. By sea it takes cargo six weeks to travel from AFRICAN
the inland manufacturing city of Chengdu to Europe, but
02 AMBITIONS
traffic on the North East Passage, where ships
follow icebreakers from Europe to Asia through
now a rail freight service reaches Poland in two weeks. the Arctic Ocean. This could require new
There is even a train service to Madrid from eastern A major infrastructure project in Kenya is LAPSSET
logistics centres to serve the route.
China that takes three weeks. To improve connections, a (Lamu Port and Lamu-South Sudan-Ethiopia
U.S.$40 bn Silk Road Fund has been established to finance Transport Corridor). This consists of a new 30-berth
infrastructure projects abroad. port and oil refinery at Lamu, which will be
connected to Nairobi and the borders of Ethiopia
There are also plans to link Kunming in southern China
and South Sudan by rail, road and oil pipelines. In
to Singapore via several lines running through Myanmar,
Ethiopia, a new Chinese funded railway line between
Vietnam, Laos and Cambodia. Further afield, China is
Addis Ababa and the Red Sea port of Djibouti is
majority financing a new railway from the Kenyan port of
expected to begin operations in 2016. Work has just
Mombasa to Nairobi, which is under construction. This all
completed in Addis Ababa on a light rail system for
forms part of China’s ‘One Belt, One Road’ programme to
the city.
enhance trade routes. As China diversifies its trade routes,
new business hubs will appear, creating opportunities for In Nigeria, a Chinese firm has won the U.S.$12 bn
property investors. contract to build an 870 mile railway between Lagos
in the west and Calabar in the east. Construction has
started on a new port to the east of Lagos at Lekki,
with phase one scheduled for completion in 2018.
G AT E WAY CI T I E S
Lower Manhattan, plan to extend the 7 train to 34th Street government tenants, media and financial
New York City, U.S.
and 11th Avenue, creating the level of firms. Three World Trade Center is under
interconnectivity necessary to sustain construction and will be anchored by
a business district on the Far West global advertising giant, Group M. Two
40.7127° N, 74.0059° W
16
17
Side. Subsequently, various prominent World Trade Center, which is still in the
landlords, including Related Properties, planning stages, has drawn significant
Brookfield Properties, Tishman Speyer, attention from News Corporation for
Manhattan is experiencing Mitsui Fudosan and The Moinian approximately half of its proposed 2.8
Group, have invested in developments million sq ft of space.
a transformational surrounding the Hudson Yards site. Redevelopment of the World Trade
wave of new development The Far West Side has drawn a number of Center and its immediate vicinity
high-profile commitments from various includes two new transit hubs, an 18 acre
industries, such as legal, technology, memorial park and museum, and nearly
NEW YORK CITY
creative and luxury goods, which enabled 600,000 sq ft of retail at three sites.
construction to commence on additional Westfield Group will open a 365,000 sq ft
towers and boosted the area’s visibility. retail complex at the World Trade Center
Coach, L’Oreal, SAP, Time Warner and Transit Hub and at the base of Three
Skadden, Arps, Slate, Meagher & Flom and Four World Trade Center. Brookfield
are examples of anchor tenants that have Properties is upgrading 200,000 sq ft of
allowed various projects to enter the next shopping and dining space at Brookfield
phase of development. Place. Saks Fifth Avenue will anchor
Running concurrent to the office pipeline Brookfield’s retail complex with a four
at Hudson Yards is the development of floor, 85,000 sq ft department store. The
nearly 4.0 million sq ft of residential Fulton Transit Center, with 65,000 sq ft
space alongside world class retail, of retail space, will connect to the World
the city’s inventory and offer comparable
COMMERCIAL DEVELOPMENT PIPELINE hospitality and amenities. Luxury retailer Trade Center Site and Brookfield Place
via an underground passageway.
options similar to other global cities. (‘000s SQ FT) Neiman Marcus will establish its first
presence in New York City with a 250,000
WRITTEN BY
Jonathan Mazur, Additionally, the nature of the workplace 12,000 Source: Newmark Grubb Knight Frank Research sq ft store at Related’s retail complex
Managing Director, Research, is in the midst of a paradigm shift, with sitting atop the main rail yards site.
and David Chase, Research Analyst the emphasis on increased density, open
at Newmark Grubb Knight Frank Further Downtown, the World Trade
10,369
floor plans, collaborative space and
complex is undergoing a massive
shared recreational facilities. The rapid
rebuilding effort. One World Trade
9,793
With 26 million sq ft of new office space growth of the TAMI sector has been the
slated for completion, New York City is in
10,000 Center delivered 3.0 million sq ft in
main driving force behind the work/play
the midst of a construction renaissance November 2014. Condé Nast, the
office design, borne out of the workplace
similar to that of the 1980s, when more building’s 1.2 million sq ft anchor tenant,
campuses of Silicon Valley and the
than 50 million sq ft of space was built. relocated from Times Square, an area the
retro-fitted loft spaces in Midtown South
The lack of modern office product company helped revitalize two decades
that became the archetype for creative
in Manhattan’s traditional business workspace. Large TAMI tenants have 8,000 ago. Four World Trade Center, the first
new tower completed on the site in 2013,
corridors, coupled with growing demand
7,087
been among the most active players in the
is approximately 60% leased, including
from the expanding TAMI (Technology, new developments on the Far West Side
Advertising, Media, and Information) and at the World Trade Center.
sector, has driven the large-scale Expected Potential
5,682
development projects underway on the 6,000 Delivery Delivery 10.3
5,437
5,252
Far West Side and at the World Trade
“THE NATURE OF THE 16.6 MSF MSF
4,900
Center site.
4,659
4,600
Inactivity in Manhattan’s construction WORKPLACE IS IN THE MIDST
4,173
4,100
pipeline over the past 15 years has
OF A PARADIGM SHIFT”
3,732
3,612
created substantial pent up demand for 4,000
3,371
3,257
3,170
modern offices. With an average age of
3,057
2,983
2,831
70 years, most buildings in the traditional With eight buildings comprising 16.4 1980 to 2014
2,430
totals 82.4
2,387
Midtown core submarkets cannot offer million sq ft of new ultra prime office
2,217
msf of new
2,141
the space efficiency and customization space in the construction pipeline,
1,860
construction
1,700
1,600
that many tenants now expect when the burgeoning development at the 2,000
1,300
making long-term lease commitments. Hudson Yards rail site amounts to the
979
970
Government rezoning initiatives are ground up creation of an entire micro
850
underway to incentivize landlords to market on Manhattan’s Far West Side.
259
replace outdated office buildings with The project gained momentum from
175
102
60
0
0
0
0
0
0
0
0
modern skyscrapers that would enhance the Metropolitan Transit Authority’s
0
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TBD
G AT E WAY CI T I E S
1.3000° N, 103.8000° E
19
18
SINGAPORE
Helix Bridge and preference for city centres shown by the
Marina Bay Sands
TMT sector across the world.
Hotel, Singapore
Also, Singapore is working towards a well
diversified and sustainable economy that
builds upon its success in healthcare,
education, logistics, aerospace,
petrochemicals, and biotechnology. For
many firms in these industries, locating
in the CBD is not essential – indeed,
globally, aerospace and biotechnology
firms are usually in suburban office
New business locations will markets – which should generate office
demand in the Fringes. The government
house future office demand
plans to establish various commercial
WRITTEN BY clusters, business and industrial parks by
Alice Tan, 2030 provide further insight into where
Director and Head, future property development will appear
Consultancy & Research, in Singapore.
Knight Frank Singapore
Singapore’s stellar transformation from increased by 40% over the same period. future sources of demand emerging that
‘third world to first’ in the span of five This is not to say the traditional CBD will create opportunities in both the CBD BREAKDOWN AND PROPORTION OF SINGAPORE OFFICE SPACE
decades is a success story many other stagnated. In fact, it expanded on to land and the Fringes. BY AREA / REGION, 2000 TO FIRST HALF 2015 Source: REALIS, Knight Frank Research
nations aspire to match, but few succeed. reclaimed from the sea at Marina Bay, While at present the financial sector
The process of building the city state where tower developments housed the is seeing consolidation, leaving some Downtown Core (LHS) Orchard (LHS) Rest of Central Area (LHS) Fringe Area (LHS) Outside Central Region (LHS)
into a thriving metropolis was shaped front offices of Singapore’s fast growing occupiers with ‘shadow’ space, in the
by the need to decentralise business financial community. long run, finance should benefit from % Proportion to total office stock- Outside Central Region (RHS)
locations and house new, up-and-coming This created a real estate landscape Singapore’s growth as the key trading % Proportion to total office stock- Fringe Area (RHS)
industries. The Global Financial Crisis that was highly suited to the financial centre for South East Asia. To date, % Proportion to total office stock- Central Area (RHS)
(GFC) and the rise of new technology and business services industries, with asset management, insurance and
office tenants is now resulting in changes front office operations paying higher currency trading are fast growing
in occupier demand in the CBD and rents to be in CBD buildings, while industries, which are drawn to 90k 80%
Fringe office markets, with future back offices occupied more affordable Singapore by the conducive business
opportunities for both. space in Fringe districts like Tampines environment. This should provide
80k 70%
Changes in legislation to give greater and Changi. As office rents escalated in demand in the long-term for both the
powers to landlords in 1969 paved the 2007, government agencies were urged CBD and Fringe markets, from front
way for wholesale redevelopment of the to consider relocating out of the CBD to and back office operations respectively. 70k
city centre during the 1970s and 1980s, make space for the private sector. 60%
Technology firms are in our view a strong
which provided the offices to support However, the post-2007 period has been source of future demand for offices in
Singapore’s rapid growth during those 60k
a time when the relationship between the Singapore. The Smart Nation iN2015
% Proportion to total office stock
decades. However, to create business 50%
CBD and the Fringes has changed. After
Net office stock (‘000 sq ft)
Office buildings masterplan is a positive step towards
in Raffles Place, space to accommodate future waves of the falls in rents during the GFC, the
Singapore
promoting technology, and will benefit 50k
expansion, a policy of ‘decentralisation’ CBD became more affordable, reducing various sectors of the economy, including
was adopted through the 1991 Concept 40%
pressure on cost conscious tenants commercial property. Moreover, as
Plan. This aimed to use the Mass Rapid to consider relocating to the Fringes. the workforce becomes increasingly 40k
Transit (MRT) rail system to establish Consistent with the experience in New dominated by tech-savvy Millennials, 30%
business centres outside the crowded York and London, the TMT (Technology, companies need to change the way they 30k
CBD area, creating new suburban and Media and Telecoms) sector defied work. This will mean a rethink in how
peripheral office markets. decentralisation and made its foray into firms lay out their offices, where they
“TECHNOLOGY FIRMS ARE IN Decentralisation resulted in an
expanded commercial real estate
the CBD.
Office rents peaked in Q1 2015, amid
are located, and how much technology
is incorporated into the workplace (and
20k
20%
OUR VIEW A STRONG SOURCE market. Within the past 15 years, total
office space stock in Singapore grew
slowing demand and consolidation of
office space in the face of an economic
indeed in public areas, and the home).
This will buoy technology firms and in
10k 10%
OF FUTURE DEMAND” by 24% to 81.6 million sq ft (see graph),
although in the Fringe area, stock
slowdown in the Asia Pacific region.
However, over the long-term we see
turn generate office demand, probably
with more of a CBD bias, given the 0 0%
H1 2015
2000
2006
2008
2009
2003
2005
2002
2004
2007
2001
2010
2013
2012
2014
2011
G AT E WAY CI T I E S
Shoreditch
51.5072° N, 0.1275° W
26.3%
LONDON
020
021
Office rental growth
20
21
Noho TRANSPORT HUBS Euston Q3 07 to Q2 15
17.4%
Crossrail 1 intersects with the Thameslink rail
34.8%
Office rental growth
Q3 07 to Q2 15
upgrade at Farringdon, creating a new travel hub.
Crossrail 2 would meet Crossrail 1 at Tottenham
Court Road, then Thameslink at St Pancras,
producing two more interchange hot spots.
Office rental growth
Q3 07 to Q2 15
City Core
London is being transformed
by a new wave of creative
firms and rail links 2.4% Aldgate
WRITTEN BY
Soho
Office rental growth
Q3 07 to Q2 15
15.1%
Office rental growth
12.5%
Q3 07 to Q2 15
Patrick Scanlon,
Partner, Central London Research,
Knight Frank
Office rental growth
Q3 07 to Q2 15
The third quarter of 2007 was the time HEATHROW AIRPORT DEVELOPMENT
that the Global Financial Crisis (GFC) Heathrow is a major business centre Since 2000, central London has seen
reached London, as confidence in the as well as a transport hub. There is more more than 70 million sq ft of new offices
banking sector slumped. However, eight office stock in the surrounding area than built. This is more than the total office
years later, the office market is thriving. there is in the CBD of Birmingham, stock of Singapore. Yet London’s vacancy
London’s economy is being driven by the U.K.’s second largest city. rate is falling and at a 14 year low.
a new wave of technology and creative
firms who are shaping the digital
Mayfair Holborn
age. The last year has also seen more
7.0% 14.8%
traditional financial and professional
occupiers initiating office searches,
which demonstrates broadening demand.
Office rental growth
Comparing rents today with Q3 2007, Q3 07 to Q2 15
Office rental growth
Q3 07 to Q2 15
the strongest growth has occurred in
the areas popular with the technology
and creative industries. Noho is a
former garments industry district that
is now home to many leading creative
firms. Prime rents are 35% higher today Southbank
compared to Q3 2007. Shoreditch, another CROSSRAIL 1
19.8%
former industrial area, is a hub for start- London’s under construction east-west
up technology firms. Office rents there rail line opens in 2018. We expect a boost
are 26% above their pre-GFC peak. for office rents near Crossrail stations in
Office rental growth
Infrastructure projects abound in London. the 2017 to 2019 period, i.e. just before Q3 07 to Q2 15
The development potential of the Nine and after services commence.
Elms corridor is being unlocked thanks
to a planned new underground rail line Paddington
to the Battersea Power Station site. With
the Crossrail 1 and Thameslink upgrade
railway projects under construction, we
are seeing the development of a transport
hub running from Tottenham Court Road
-7.7%
Office rental growth
Q3 07 to Q2 15
BATTERSEA & NINE ELMS
Plans for a new U.S. Embassy, extensive
mixed-use schemes, a new underground
to Farringdon to King’s Cross. This hub rail line, and redevelopment of the
would be boosted further if the proposed iconic Battersea Power Station site, will
Crossrail 2 receives government approval. transform this former industrial area.
Source: Knight Frank ResearchG AT E WAY CI T I E S
CBD, CBD2 AND POTENTIAL LOCATION OF CBD3 Source: Knight Frank Research
22.2783° N, 114.1747° E
22
23
Kowloon East
NEW HORIZONS FOR
(CBD2)
Victoria
Harbour
HONG KONG
East Lantau
Metropolis Central
Victoria Harbour,
(CBD3) CBD
Hong Kong Hong Kong
Island
A shortage of office space and high Land shortage in Hong Kong is where net effective rents rose above supporting policies, such as land Meanwhile, a new East Lantau NEW CBDs W ILL FURTHER
a widely known problem for the U.S.$186 per sq ft per annum recently. rezoning, improvement of connectivity Metropolis is proposed to become the ENH A NCE CENTR A L
rents in the city’s Central Business densely populated city. Limited Manufacturing firms shifting and enhanced urban design, have also third core business area over the next
District are leading to decentralisation office availability in the CBD, operations to mainland China have accelerated the redevelopment process 50 years. In the latest policy address, In the coming years, emerging CBDs
in the area. As an emerging business the government announced its plan will continue to witness rapid growth
also known as Central, means it is left Kowloon East with many vacant
WRITTEN BY district with abundant supply, Kowloon to reclaim a 1,000 hectare manmade and help alleviate the office shortage
becoming increasingly difficult to industrial buildings. In order to
Pamela Tsui, problem in the Central CBD. Given the
fulfil multinational companies’ rising alleviate Hong Kong’s office supply East’s office rents are still as low as island in waters between Hong Kong
Senior Manager, Research & Consultancy, considerable rental gap between various
Greater China, Knight Frank demand for business space. With the shortage, the government announced U.S.$46.50 per sq ft per annum. Island and Lantau Island.
business districts, this decentralisation
highest prime office rents across the an initiative to develop Kowloon East
THE NEW CBDs CA NNOT trend is expected to continue.
globe, Hong Kong also creates a major into CBD2 in 2012. Many former
challenge for firms who wish to set up factories have been redeveloped as “KOWLOON EAST HAS NOW R EPL ACE CENT R A L History has proven that once the rental
gap between core and decentralised
offices there – especially in Central, high quality office buildings. Other
BECOME THE SECOND Despite the concentration of quality
stock and attractive rents, we believe business areas has narrowed, the
OFFICE RENTS IN CENTRAL AND KOWLOON EAST Source: Knight Frank Research
LARGEST BUSINESS AREA CBD2 cannot replace Central in the
short-term because only some firms
decentralisation process slows down
as companies have less incentive to
180
AFTER CENTRAL” or operations (e.g. back offices) prefer
relocating to Kowloon East. Some
relocate their offices, especially when
increasing relocation costs are taken into
Central Kowloon East consideration. Therefore, Central’s role as
industries will opt to stay in Central due
160 Thanks to the ample supply of new the prime office district and commercial
to company image, transport accessibility
offices, and the significant rent hub in Hong Kong is unlikely to be
and proximity to related business clusters
140 discount compared to Central, many replaced in the short to medium-term.
– law, accounting and financial firms
companies that are anxious to control usually locate together. CBD2 will not In the long-term, although
120 decentralisation will remain one of
costs have relocated to Kowloon East in replace Central as it still needs further
recent years. development in area image, connectivity the most important trends changing
HK$/sq ft/month
100
Kowloon East has now become the and business clusters, which cannot be the landscape of the Hong Kong office
80 second largest business area after achieved in a short period of time. As market, we believe emerging CBDs
Central in terms of Grade A office stock. for CBD3, it will take several years to will serve as complements, rather than
60 With many upcoming development complete, and the developments are direct competitors, to Central.
projects in Kowloon East, the total expected to be mainly residential and
40
amount of Grade A office space in the retail. As a result, there is little prospect
20 area is expected to overtake Central of it ever replacing Central as Hong
within the coming decade. Kong’s prime commercial location.
2006
2008
2009
2003
2005
2004
2007
0
2010
2013
2015
2012
2014
2011G AT E WAY CI T I E S
Le Cargo, Paris,
France
48.8567° N, 2.3508° E
24
25
PARIS
Commuting through the
business district, Paris, France
377,000 sq ft of shared space will be made
available to start-ups in this entirely private
investment, headed by a leading French
business tycoon.
Expectations are high in this area of
strong demand. France and its capital
city stand out at at a European level in
terms of the number and vitality of tech
start-ups. At the Consumer Electronics
Show (CES) 2015 in Las Vegas, the
largest tech event in the world, France,
with 120 exhibitors, had the greatest
presence among European countries
WRITTEN BY - far ahead of Germany (39) and the
Cyril Robert, United Kingdom (33). In Eureka Park,
Head of Research,
Knight Frank France the section dedicated to emerging start-
ups, one in four businesses were French.
Naturally, some of these companies come
The Cargo has landed in the from outside Paris, but the Paris tech
19th arrondissement of Paris scene is particularly vibrant and always
on the lookout for growth opportunities.
With more than 160,000 sq ft across six plays a vital role in this new world, Paris has launched the first Paris French
floors, The Cargo is the largest start- PARIS OFFICE VACANCY RATES drawing on its own mechanisms, players, Tech Ticket competition targeted at
up incubator yet in the French capital. Source: Knight Frank Research
organisation and working methods. foreign businesses wishing to join the
Moored alongside the impressive 2,000 ft Businesses aim to attract high flying young Paris tech scene.
CBD Paris Region professionals by offering a workplace
long Macdonald warehouse, The Cargo fits Innovative businesses are flocking to
in perfectly with other ship-like structures 8.1% that is fun, fluid and part of the work- areas which were previously economically
8.0%
8.0%
in the area. The Macdonald industrial life balance. The aim is to blur the lines disadvantaged and working class, where
8% 7.7%
building from the 1960s is currently between work and leisure, which leads to there was little interest in the commercial
7.3%
undergoing a major transformation, less clock watching and reduced hierarchy. property market until now: from the north
7.1%
7.1%
7.1%
7.0%
7.0%
7.0%
6.9%
harbouring a secondary school, over 7% The Cargo is designed with the challenge to the south of Paris, from the 13th to the
1,000 housing units, 355,000 sq ft of posed by the sociologist Bruno Marzloff 19th arrondissement, and along the ring
retail, as well as 290,000 sq ft of office in mind: we need to rethink the work road that defines the city limits. These
6.0%
space. The office element has recently 6% that makes a city. As a result of this areas form an arch of innovation which
become home to hundreds of employees changed approach to work and urban is being actively promoted by the local
of a leading financial institution. This living, offices, public and private spaces, authorities. It boasts competitively priced
4.9%
port is the gateway to the future, the 5% neighbourhoods and even the city will property, development opportunities and
Paris of tomorrow: mixed-use, hi-tech, undergo a profound transformation
4.3%
an increasingly young and trendy feel. A
environmentally friendly, plugged in, towards greater openness, equality, and number of new developments are coming
multi-sector and socially inclusive – 4% a stronger community spirit: longer to these areas, with a call for proposals
a smart city. opening hours and more services, new from teams backed by investors, with
The Cargo clearly has flagship status, ways of using them and emerging roles. local authorities entrusting the projects
3%
with its high specification, and portholes to the most innovative bidder. Even the
“YES, THE REVOLUTION
Business district This major change is no work of science
for maritime effect. It is part of the new in Paris, France fiction. The Cargo is not an isolated step in tower block is no longer a dirty word. In
urban model, which acknowledges that this process: the various co-working spaces June, the Paris City Council approved
2%
businesses are made up of individuals are another example of this new movement the Triangle tower project led by Unibail
whose wider needs have to be catered
for. This includes homes, shops and
leisure facilities, that are all close to
1% IS HERE!” for a radical step away from traditional
office buildings – a phenomenon that is
still in its infancy. However, The Cargo
Rodamco. This 590 ft skyscraper, located at
Porte de Versailles (15th arrondissement)
and designed by the architects, Herzog
work. Via a workplace that is integrated will not remain Paris’s largest incubator and de Meuron, will be the first mixed-use
into an individual’s daily life, companies 0% for long. With the Halle Freyssinet due to new generation skyscraper to grace the
forge links with their employees, and a open its doors in the 13th arrondissement Parisian skyline.
H2 2008
H2 2009
H1 2008
H1 2009
H2 2010
H2 2013
H2 2012
H2 2014
H1 2010
H1 2013
H1 2015
H2 2011
H1 2012
H1 2014
H1 2011
community is born. The new economy of Paris in just over a year, more than Yes, the revolution is here!GL OBA L O CC U PI E R S
26
27
In the future, the office will principally be a place
that generates staff satisfaction and interaction
WRITTEN BY
James Roberts,
Chief Economist, Knight Frank
How businesses view their offices has figure, with the average newly qualified
changed enormously in the past two commercial lawyer earning U.S.$91,000,
decades. Previously the emphasis was according to recruitment firm Michael
on cost control. Firms looked for ways Page, suggesting a replacement cost of
to pack more desks on to floors, and nearly U.S.$143,000.
there was a trend towards relocating Given that the cost to the business
jobs from expensive Central Business of replacing the worker vastly
Districts (CBDs) to lower cost out-of- overshadows property costs, more firms
town office markets. However, today are questioning the logic of achieving a
firms are more conscious of the role small saving by moving to a peripheral
the workplace plays in controlling a business location if it increases staff
far bigger business cost - namely staff turnover. There are even examples of
retention. This is reversing the out- firms choosing to move out-of-town jobs
of-town trend, and transforming the into more expensive CBD areas in order
perception of the office from a business to appeal to a broader talent pool.
expense into a place that firms use to
inspire and energise their staff.
LOSING STA FF “THERE ARE EVEN
IS EX PENSI V E
EXAMPLES OF FIRMS
A study by Oxford Economics found
that the cost of replacing a member of CHOOSING TO MOVE
staff averages U.S.$50,000, with over
80% of the cost in lost output while OUT-OF-TOWN JOBS
INTO MORE EXPENSIVE
FUTURE BREAKING
the new employee gets up to speed. If
the new worker is in a leadership or
rainmaking role, this loss of output
could have a trickledown effect on other CBD AREAS IN ORDER TO
staff who are reliant upon that person
for work generation or guidance.
APPEAL TO A BROADER
On top of the replacement cost, there is
also the loss of value that goes out the
TALENT POOL”
door with the departing employee, such
AC TI V IT Y-BA SED WOR K I NG
OFFICES THE MOULD
as training, knowledge, reputation, and
client relationships. Some studies estimate Indeed, transforming the office into an
the total cost of losing an employee can be inspiring and enjoyable place to work
equivalent of 150% of salary. is now seen as a cost effective means of
For a typical office worker in London, retaining staff. In Europe and North
the total cost of their workstation in rent, America, technology and media firms
local taxes and service charge, is around were the first to break the mould, and
U.S.$16,000 per annum. The median bring free buffets, exercise areas, spiral
salary in London is U.S.$54,000, so based staircases, games rooms, and sofas into the
on the 150% figure, their replacement cost office, and now more traditional industries
is U.S.$81,000 or five times the cost of a are following suit.
workstation. Most professional workers
earn far more than the U.S.$54,000 CONTINUED ON 28-29GL OBA L O CC U PI E R S
29
28
CONTINUED FROM 26-27 FCB,
Chicago, U.S.
In Australia, the financial sector has led worker for those actually in the office,
this movement away from the desk, known but based on the assumption that
as activity-based working (or ABW), which a percentage of staff will be out of
beckons the question: will all industries the office at any given time.
eventually go down this route?
D O Y O U R E A L LY
Levels of adoption of ABW vary from
NEED A DESK?
one city to the next. In some European
cities, where the office stock contains a Cutting the bond to a personal desk is
lot of historic buildings, internal walls allowing firms who fully embrace ABW to
sometimes can hinder adopting ABW. take a lower multiple of space compared
Another issue is when lease expiries fall, to total staff. This does not mean that
as it is during a relocation that a company firms will need less office space in the
has to acquire a new fit-out, making it the Atlas Holdings,
future, as the total workforce continues to
time for a radical change. Consequently, Greenwich, expand over the long-term in most Global
the shift to ABW will be gradual – not Conneticut, U.S. Cities. Irrespective of whether they
earthquake – in any market. allocate 90 or 100 sq ft for each additional
worker, a firm still needs to acquire more
ON T O PH A SE T WO space as it grows. However, the multiple
The first wave of ABW was about of space per worker is probably going to
breaking down barriers in the office, fall, as companies will utilise absence to
and creating a communal atmosphere. offer a spacious office to those who are
However, we are now seeing a second actually at work.
phase that builds on the experiences of The net result is that companies are
phase one. By removing the partitions achieving highly efficient offices, but
and increasing the level of interaction, staying in the more expensive CBD
noise is becoming an issue for those areas. This allows staff to enjoy all the
who need some quiet time to write a
report. Some firms have found that by “TRANSFORMING THE OFFICE amenities available in city centres, and
indeed that amenity offering supports
INTO AN INSPIRING AND
removing cellular offices they lost a raft the companies’ own activities. In any
of unofficial meeting rooms, placing Global City, the cafés and restaurants
extra strain on the actual meeting are actually the unofficial meeting
rooms. So, interestingly, the next wave
of ABW is now putting some barriers ENJOYABLE PLACE TO WORK IS rooms of the business community, while
their sports and cultural venues are
NOW SEEN AS A COST-EFFECTIVE
back in, introducing quiet areas and used by firms in their marketing mix. A
private booths. company distances itself from all these
We are also now seeing more firms ‘beyond-the-office’ benefits of the big
who are going down the ABW route
aiming to provide more space per MEANS OF RETAINING STAFF” Draft Inc,
Tokyo, Japan
city when it moves to a business park.
CONTINUED ON 30
EGO SPACE FOR THE BOSS?
A Hong Kong executive in an advertising firm gets four
4:1 1.9:1 1.9:1 1.5:1 1:1
times more office space than his secretary, but in
Sydney the boss and PA get about the same. Here is the
‘boss to support staff’ office space ratio from ad firms
around the world
Executive Support staff
Source: Knight Frank Research / Newmark Grubb Knight Frank Research HONG KONG LONDON SHANGHAI NEW YORK SY D N EYGL OBA L O CC U PI E R S
30
31
CONTINUED FROM
CROWD
28-29
CH A LLENGING
PA S T C O N V E N T I O N S
OFFICE SPACE ALLOCATION
Around the world we see huge
IN CORPORATE HQs IN VARIOUS GLOBAL CITIES (IN SQ FT)
disparities in how offices are occupied.
WORKING
These typically reflect cultural 225 150 100
differences, and the extent of those
SAN
variations was not widely known
FRANCISCO
when globalisation was in its earlier Executive Professional Support
stages. Twenty years ago, a senior
partner in a Chicago law firm with no
overseas offices was probably unaware
that lawyers in London occupied 250 150 100
far less office space per worker. The rise and rise of collaborative offices
As businesses merge and expand NEW YORK
CITY WRITTEN BY
into global networks, and staff are Executive Professional Support James Roberts,
transferred overseas, awareness of the
Chief Economist, Knight Frank Level39 offices,
differences grow. London
Previous conventions on office
occupation are being called into
180 120 100 New technology has been bringing
question. Knight Frank figures show previously unconnected people together to
that a professional worker in a Hong LONDON achieve things. We have crowd sourcing to
Kong corporation is typically occupying Executive Professional Support develop ideas, and crowd funding to raise
200 sq ft in a cellular office, but his money. Now a new type of office is bringing
Shanghai equivalent occupies 160 sq people together, often in the service of
ft in a cubicle. Meanwhile his Sydney advancing the tech economy.
equivalent occupies 120 ft in open 250 200 100 Collaborative offices are the real estate
plan. How long before firms with equivalent of crowd sourcing, but
HONG
global networks start asking why there KONG in the form of a rather cool serviced
should be so much difference in office Executive Professional Support office. An office space is fitted out with
occupation by people doing much the a combination of meeting rooms, hot
same job? desks, and lots activity-based working
In the Global Cities, firms are thinking (ABW) space, with sofas and communal
220 160 120 tables. Entrepreneurs then take out
long-term and planning for headcount
growth again, and they want their offices memberships allowing different levels
to help keep staff happy and reduce SHANGHAI of access, where they will mingle with
headcount attrition (which costs firms far Executive Professional Support other people running their own firms.
more than rents do). They want to reduce The fit-out is often unashamedly targeted
the per-person ratio of occupation, but towards Millennials, and the tech and WeWork offices, the wider idea pool of their co-workers, in insurance locations. In New York City,
packing people in with ever-smaller creative industries. London
the same way staff in larger companies WeWork has 2 million sq ft of office space.
222 111 89
desks does not make for a conducive Some entrepreneurs pay by the hour to can when in the office. WeWork is also branching out from flexible
working environment, and relocations use a café area with wifi, while others pay While collaborative offices first emerged working to flexible living. It has established
out-of-town can be unpopular. ABW MADRID monthly fees for all day access and wider in San Francisco, driven by technology a new short-stay apartment format, known
offers a solution, providing more space Executive Professional Support ranging services. entrepreneur demand, the past few years as WeLive, in two buildings where its
for people to work in by utilising the fact The concept is proof that offices are a have seen the format go global. Having collaborative offices are found – one in
that a proportion of staff are not in the necessity for any business, and the benefits begun operations in New York in 2010, Washington DC, the other in Downtown
office at any given time. 120 120 120 they offer stretch beyond providing WeWork has since opened in 11 other Manhattan. A WeWork pre-let in the
The extent to which ABW is embraced somewhere to log on to a computer. U.S. cities, as well as in the U.K., the Brooklyn Navy Yard will also include
will always vary from one company to Entrepreneurs check into collaborative Netherlands and Israel. A year ago, they WeLive apartments.
SYDNEY
the next, but its influence is spreading Executive Professional Support offices as they want the intellectual had no presence in London, but WeWork To add to crowd sourcing, and crowd
across industries and throughout the synergies that arise as people converse now has over 320,000 sq ft of office space funding, we can now add crowd living.
globe. Thus the future office will be and trade ideas in a working environment. there; some of it in technology and media
Source: Knight Frank Research / Newmark Grubb Knight Frank Research
dominated less by the desk, and more Note: Corporate HQ is defined as the head office of an industrial, energy,
By banding together in communal office districts like Soho and Whitechapel, but
by the comfortable sofa. or manufacturing conglomerate. space, entrepreneurs are thus able to access also in more traditional financial andYou can also read
