International office space construction is taking off as developing economies mature and foreign powerhouses look to lure multi-national corporations with brand new facilities. With large amounts of space coming online, could the new construction possibly affect the demand for space in the United States?
To give an idea of the gap between the U.S. and the international community consider that Dubai, Mumbai and Shanghai are expected to add around 64 million square feet of space between 2010 and 2011. Traditionally strong domestic markets like Chicago, Los Angeles and 新蒲崗辦公室租 San Francisco will add just over 1.3 million square feet in that same period. In Manhattan new construction has essentially dried up save for ongoing projects like the World Trade Center whose main tower is expected to be completed in 2013.
Part of the international boom can be attributed to higher prices for space. One fact that surprises those not familiar with the office market is that the ten most expensive cities for office space are all international. London’s West End is the most expensive area followed by Hong Kong, Tokyo, Mumbai and Moscow. Manhattan, the most expensive market in the United States is in the mid-20s.
According to some analysts, landlords in the United States should be worried because certain tenants (financial firms for existence) require newer office space and many domestic office markets may be at a competitive disadvantage.
While there are a number of differences between establishing a major presence in the United States as opposed to an international market, we now live in a world where international business can be conducted from any point in the world.