USD 14.07 Trillion
Global Office Real Estate Market Size, Share, Growth Analysis, By Property type(Corporate Office, and Non-Corporate Office), By Rental model(Traditional long-term leases, flexible lease arrangements), By Classification(Class A, Class B) - Industry Forecast 2024-2031
Report ID:
SQMIG60K2002 |
Region:
Global |
Published Date: April, 2024
Pages:
176
|
Tables:
91 |
Figures:
76
Global Office Real Estate Market Insights
Global Office Real Estate Market size was valued at USD 14.07 Trillion in 2022 and is poised to grow from USD 14.66 Trillion in 2023 to USD 20.38 Trillion by 2031, at a CAGR of 4.2% during the forecast period (2024-2031).
Global Office Real Estate Market is a dynamic and vital sector that serves as a cornerstone for economic activities worldwide. It encompasses major financial hubs such as Manhattan in New York and the technology epicenter of San Francisco, both of which experienced negative office space absorption in the first quarter of 2022. Similarly, Dallas and Houston in Texas faced high vacancy rates of over 29%. However, despite the disruptions caused by the coronavirus pandemic, the market exhibited resilience and rebounded strongly in 2021, approaching pre-pandemic investment levels. Rental rates have been steadily increasing over the years, indicating the growing demand for office spaces. The office rental index, based on a 2008 base value of 100, recorded a remarkable growth of more than 24% as of September 2021. Notably, Manhattan, NY, and San Francisco, CA, stood out as the most expensive office markets, with annual square footage rents of $129 and $97, respectively.
In Europe, the office real estate market experienced a significant decline in lease activity during 2020 and 2021 due to the pandemic. However, the sector displayed signs of recovery in the latter half of 2021, with a noticeable increase in take-up. The first half of 2022 saw a robust rebound, with a take-up of 4.31 million square meters, indicating a fast-track recovery for the European office market. Key investment hotspots in Europe included major German cities like Berlin, Hamburg, Munich, and Frankfurt, as well as Paris and London. Meanwhile, Metro Manila in the Philippines showcased its growing office real estate market, with a cost of 1,037 Philippine pesos (approximately $19.01 USD) per square meter per month in the second quarter of 2022. Despite the attractive pricing, potential investors should consider factors such as property taxes, rental taxes, and the absence of loan repayment rebates, as office properties do not receive the same tax incentives as residential properties. The office real estate market, driven by economic activities and evolving work environments, presents both challenges and opportunities. While negative office space absorption in certain locations highlights the need for adaptability, the steady growth in rental rates and the recovery of markets post-pandemic indicate a positive outlook. Investors can explore emerging markets, leverage demand in key cities, and capitalize on the resilience and potential of the global office real estate sector.
US Office Real Estate Market is poised to grow at sustainable CAGR for the next forecast year
Market snapshot - 2024-2031
Global Market Size
Largest Segment
Class A
Fastest Growth
Class B
Growth Rate
4.2% CAGR
Global Office Real Estate Market ($ Bn)
Country Share for North America Region (%)
Global Office Real Estate Market By Classification ($ Bn)
Global Office Real Estate Market By Classification (%)
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Global Office Real Estate Market Segmental Analysis
Global Office Real Estate Market is segmented on the basis of property type, rental model, classification, and region. By property type, the market is segmented into Corporate Office, and Non-Corporate Office. By rental model, the market is segmented into traditional long-term leases, flexible lease arrangements, and coworking/shared office spaces. By classification, the market is segmented into Class A, Class B, and Class C. By region, the market is segmented into North America, Europe, Asia Pacific, Middle East and Africa, and Latin America.
Office Real Estate Market Analysis By Property Type
There are two sectors—Corporate Offices and Non-Corporate Offices, which play the most important roles in turn, showing different evolution paths and development tendencies. The largest segment, Corporate Offices, stands as the cornerstone of the market, representing a substantial share driven by the robust demand from multinational corporations and established enterprises. Corporate offices are the epicenter of business operations, strategic decision-making and collaborative efforts, which makes them an essential element of commercial real estate. With a significant presence in the world’s most prominent business cities, Corporate Offices demonstrate not only solidity but also growth potential, since businesses seek top-of-the-line offices to encourage innovation, attract talent and engage employees.
The fastest-growing segment within the global office real estate market is the Non-Corporate Office sector, which encompasses flexible and coworking spaces. This segment experienced a rapid increase in demand, due to the growing number of startups driven by remote and flexible working models and preferring agile offices. The appeal of Non-Corporate Offices is their flexibility, allowing businesses to increase operation sizes without the limitations associated with long-term leases. This trend is accentuated by figures that show a significant year-over-year rise in the creation of coworking spaces worldwide. This development is further supported by the rationale that firms are now becoming increasingly aware of their need for agile, collaborative spaces to meet with rapidly changing work requirement. With the global workforce moving to embrace flexibility, Non-Corporate Offices become a quick growing and dynamic perspective that transforms how traditional Office.
Office Real Estate Market Analysis By Classification
The largest segment in the global office real estate market is Class A office space. Class A offices are known for their prime locations, high-quality construction, modern amenities, and top-notch infrastructure. These properties are often situated in prestigious business districts, offering unparalleled accessibility and visibility. Class A office spaces are favored by multinational corporations, high-profile companies, and organizations that prioritize a professional and prestigious image. With an impressive market share, the Class A segment dominates the global office real estate market. It captures approximately 50% of the market, showcasing its significance and popularity among businesses worldwide. The robust demand for Class A office space stems from the increasing globalization of businesses, the need for state-of-the-art facilities, and the desire to attract top talent.
On the other hand, the fastest-growing segment in the global office real estate market is Class B office space. Class B offices offer a balance between quality and affordability, making them an attractive option for small and medium-sized enterprises (SMEs) and businesses looking for cost-effective solutions without compromising on essential amenities. These properties often have well-maintained infrastructure and amenities, albeit not as luxurious or cutting-edge as Class A spaces. The Class B segment is experiencing rapid growth due to several factors. Firstly, the rise of startups and SMEs has created a demand for flexible and affordable office spaces that can accommodate their evolving needs. Secondly, the trend of remote work and hybrid office models has increased the demand for smaller office spaces in suburban areas, where Class B properties are commonly found. Lastly, cost-conscious companies are opting for Class B spaces to optimize their budgets and allocate resources to other business priorities.
Global Office Real Estate Market By Classification, 2023 (%)
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Global Office Real Estate Market Regional Insights
North America dominated the global market. Known for their iconic skylines and bustling business districts, these cities attract multinational corporations, startups, and innovative enterprises alike. North America commands a significant market share, with its advanced infrastructure, strong economy, and access to capital. For example, Manhattan, New York City's financial district, boasts some of the highest office rental prices globally and is home to prestigious firms, including finance, technology, and media giants.
Asia Pacific is expected to grow at the fastest CAGR. With its rapidly expanding economies, such as China, India, and Singapore, the region has become a magnet for business investment and expansion. For instance, the Central Business District in Shanghai, China, showcases stunning skyscrapers and hosts a diverse range of multinational companies across industries. This region offers a unique blend of tradition and modernity, attracting both domestic and international businesses seeking to tap into the vast consumer markets and emerging opportunities. Asia-Pacific is witnessing a rising market share due to its thriving urban centers, supportive government policies, and the growing influence of technology-driven industries.
Global Office Real Estate Market By Region, 2024-2031
- Largest
- Fastest
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Global Office Real Estate Market Dynamics
Office Real Estate Market Drivers
Urbanization and Economic Growth
- Rapid urbanization and economic growth in emerging markets drive the demand for office spaces. As cities expand and businesses flourish, there is a need for office real estate to accommodate the growing workforce and establish corporate headquarters. For example, cities like Shanghai, Beijing, and Bangalore have experienced significant economic growth, leading to increased demand for office spaces.
Office Real Estate Market Restraints
Economic Volatility and Uncertainty
- Economic downturns and uncertainties can impact the office real estate market. During periods of recession or economic instability, businesses may downsize, leading to a decrease in office space demand. For instance, the global financial crisis in 2008 resulted in reduced demand for office spaces as companies implemented cost-cutting measures.
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Global Office Real Estate Market Competitive Landscape
Global Office Real Estate Market is highly competitive, with numerous key players operating on both local and international levels. Major real estate companies offer a wide range of services, including property leasing, sales, asset management, and advisory services. Additionally, there are regional players and local brokerage firms that cater to specific markets. Coworking space providers like WeWork, Regus (IWG), and Knotel have also gained prominence in recent years. The competitive landscape is characterized by intense competition for prime office locations, innovative workspace designs, and technology integration to enhance tenant experiences and productivity. The market's competitiveness drives companies to differentiate themselves through service quality, market knowledge, and the ability to adapt to changing workplace trends, such as flexible work arrangements and sustainability initiatives.
Office Real Estate Market Top Player’s Company Profile
- JLL (Jones Lang LaSalle) (US)
- Colliers International Group Inc. (Canada)
- Brookfield Asset Management (Canada)
- Hines (US)
- Mitsui Fudosan Co., Ltd. (Japan)
- Unibail-Rodamco-Westfield (France)
- Skanska AB (Sweden)
- Ivanhoé Cambridge (Canada)
- Dexus (Australia)
- Mitsubishi Estate Co., Ltd. (Japan)
- Oxford Properties Group (Canada)
- Lendlease Corporation (Australia)
- Swire Properties Limited (Hong Kong)
- Hongkong Land Holdings Limited (Hong Kong)
- Prologis, Inc. (US)
- Tishman Speyer Properties (US)
- Land Securities Group plc (UK)
Office Real Estate Market Recent Developments
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In March 2024, Bradford bought high-vacancy Dallas office building, and announced that it has plans of nearly $10M in upgrades.
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In March 2024, Kinross Real Estate LLC 60 Canal St. for $8.25 million, a significant markdown from the $22 million that the seller, an affiliate of New York's Cannon Hill Capital Partners, paid in 2018.
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In March 2024, an Aiken office building occupied by UPS was sold by Marcus & Millichap, a commercial real estate brokerage firm specializing in investment sales, financing, research and advisory services, for $4.25 million.
Global Office Real Estate Key Market Trends
- Sustainability and Green Buildings: There is a growing emphasis on sustainability and energy efficiency in the office real estate sector. Companies and tenants are increasingly seeking green buildings with eco-friendly features, such as LEED certification, energy-efficient systems, and sustainable materials. This trend is driven by environmental concerns, cost savings, and corporate social responsibility.
- Coworking and Flexible Workspaces: The popularity of coworking spaces and flexible workspaces has surged in recent years. These shared office environments provide flexibility and cost-effectiveness for businesses of all sizes. Companies and entrepreneurs can access fully equipped offices, meeting rooms, and amenities without the long-term commitment of traditional leases. Examples include WeWork, Regus, and Spaces.
Global Office Real Estate Market SkyQuest Analysis
SkyQuest’s ABIRAW (Advanced Business Intelligence, Research & Analysis Wing) is our Business Information Property types team that Collects, Collates, Co-relates, and Analyses the Data collected by means of Primary Exploratory Research backed by robust Secondary Desk research.
According to our Global Office Real Estate Market analysis, the market is expected to witness steady growth due to increasing urbanization, the rise of flexible office spaces, and the demand for modern, efficient, and sustainable work environments. Additionally, the expanding presence of multinational companies, technology advancements, and favorable government policies are contributing to market expansion. However, challenges such as economic uncertainties, changing work patterns, and the impact of the COVID-19 pandemic on remote work trends may influence market dynamics. Overall, the global office real estate market presents opportunities for developers, investors, and service providers to cater to evolving workplace requirements and capitalize on the growing demand for office spaces worldwide.
| Report Metric | Details |
|---|---|
| Market size value in 2023 | USD 14.07 Trillion |
| Market size value in 2031 | USD 20.38 Trillion |
| Growth Rate | 4.2% |
| Forecast period | 2024-2031 |
| Forecast Unit (Value) | USD Trillion |
| Segments covered |
|
| Regions covered | North America (US, Canada), Europe (Germany, France, United Kingdom, Italy, Spain, Rest of Europe), Asia Pacific (China, India, Japan, Rest of Asia-Pacific), Latin America (Brazil, Rest of Latin America), Middle East & Africa (South Africa, GCC Countries, Rest of MEA) |
| Companies covered |
|
| Customization scope | Free report customization with purchase. Customization includes:-
|
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Table Of Content
Executive Summary
Market overview
- Exhibit: Executive Summary – Chart on Market Overview
- Exhibit: Executive Summary – Data Table on Market Overview
- Exhibit: Executive Summary – Chart on Global Office Real Estate Market Characteristics
- Exhibit: Executive Summary – Chart on Market by Geography
- Exhibit: Executive Summary – Chart on Market Segmentation
- Exhibit: Executive Summary – Chart on Incremental Growth
- Exhibit: Executive Summary – Data Table on Incremental Growth
- Exhibit: Executive Summary – Chart on Vendor Market Positioning
Parent Market Analysis
Market overview
Market size
- Market Dynamics
- Exhibit: Impact analysis of DROC, 2021
- Drivers
- Opportunities
- Restraints
- Challenges
- Exhibit: Impact analysis of DROC, 2021
- SWOT Analysis
KEY MARKET INSIGHTS
- Technology Analysis
- (Exhibit: Data Table: Name of technology and details)
- Pricing Analysis
- (Exhibit: Data Table: Name of technology and pricing details)
- Supply Chain Analysis
- (Exhibit: Detailed Supply Chain Presentation)
- Value Chain Analysis
- (Exhibit: Detailed Value Chain Presentation)
- Ecosystem Of the Market
- Exhibit: Parent Market Ecosystem Market Analysis
- Exhibit: Market Characteristics of Parent Market
- IP Analysis
- (Exhibit: Data Table: Name of product/technology, patents filed, inventor/company name, acquiring firm)
- Trade Analysis
- (Exhibit: Data Table: Import and Export data details)
- Startup Analysis
- (Exhibit: Data Table: Emerging startups details)
- Raw Material Analysis
- (Exhibit: Data Table: Mapping of key raw materials)
- Innovation Matrix
- (Exhibit: Positioning Matrix: Mapping of new and existing technologies)
- Pipeline product Analysis
- (Exhibit: Data Table: Name of companies and pipeline products, regional mapping)
- Macroeconomic Indicators
COVID IMPACT
- Introduction
- Impact On Economy—scenario Assessment
- Exhibit: Data on GDP - Year-over-year growth 2016-2022 (%)
- Revised Market Size
- Exhibit: Data Table on Global Office Real Estate Market size and forecast 2021-2027 ($ million)
- Impact Of COVID On Key Segments
- Exhibit: Data Table on Segment Market size and forecast 2021-2027 ($ million)
- COVID Strategies By Company
- Exhibit: Analysis on key strategies adopted by companies
MARKET DYNAMICS & OUTLOOK
- Market Dynamics
- Exhibit: Impact analysis of DROC, 2021
- Drivers
- Opportunities
- Restraints
- Challenges
- Exhibit: Impact analysis of DROC, 2021
- Regulatory Landscape
- Exhibit: Data Table on regulation from different region
- SWOT Analysis
- Porters Analysis
- Competitive rivalry
- Exhibit: Competitive rivalry Impact of key factors, 2021
- Threat of substitute products
- Exhibit: Threat of Substitute Products Impact of key factors, 2021
- Bargaining power of buyers
- Exhibit: buyers bargaining power Impact of key factors, 2021
- Threat of new entrants
- Exhibit: Threat of new entrants Impact of key factors, 2021
- Bargaining power of suppliers
- Exhibit: Threat of suppliers bargaining power Impact of key factors, 2021
- Competitive rivalry
- Skyquest special insights on future disruptions
- Political Impact
- Economic impact
- Social Impact
- Technical Impact
- Environmental Impact
- Legal Impact
Market Size by Region
- Chart on Market share by geography 2021-2027 (%)
- Data Table on Market share by geography 2021-2027(%)
- North America
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- USA
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Canada
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Europe
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- Germany
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Spain
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- France
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- UK
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of Europe
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Asia Pacific
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- China
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- India
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Japan
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- South Korea
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of Asia Pacific
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Latin America
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- Brazil
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of South America
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Middle East & Africa (MEA)
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- GCC Countries
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- South Africa
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of MEA
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
KEY COMPANY PROFILES
- Competitive Landscape
- Total number of companies covered
- Exhibit: companies covered in the report, 2021
- Top companies market positioning
- Exhibit: company positioning matrix, 2021
- Top companies market Share
- Exhibit: Pie chart analysis on company market share, 2021(%)
- Total number of companies covered
Methodology
For the Global Office Real Estate Market, our research methodology involved a mixture of primary and secondary data sources. Key steps involved in the research process are listed below:
1. Information Procurement: This stage involved the procurement of Market data or related information via primary and secondary sources. The various secondary sources used included various company websites, annual reports, trade databases, and paid databases such as Hoover's, Bloomberg Business, Factiva, and Avention. Our team did 45 primary interactions Globally which included several stakeholders such as manufacturers, customers, key opinion leaders, etc. Overall, information procurement was one of the most extensive stages in our research process.
2. Information Analysis: This step involved triangulation of data through bottom-up and top-down approaches to estimate and validate the total size and future estimate of the Global Office Real Estate Market.
3. Report Formulation: The final step entailed the placement of data points in appropriate Market spaces in an attempt to deduce viable conclusions.
4. Validation & Publishing: Validation is the most important step in the process. Validation & re-validation via an intricately designed process helped us finalize data points to be used for final calculations. The final Market estimates and forecasts were then aligned and sent to our panel of industry experts for validation of data. Once the validation was done the report was sent to our Quality Assurance team to ensure adherence to style guides, consistency & design.
Analyst Support
Customization Options
With the given market data, our dedicated team of analysts can offer you the following customization options are available for the Global Office Real Estate Market:
Product Analysis: Product matrix, which offers a detailed comparison of the product portfolio of companies.
Regional Analysis: Further analysis of the Global Office Real Estate Market for additional countries.
Competitive Analysis: Detailed analysis and profiling of additional Market players & comparative analysis of competitive products.
Go to Market Strategy: Find the high-growth channels to invest your marketing efforts and increase your customer base.
Innovation Mapping: Identify racial solutions and innovation, connected to deep ecosystems of innovators, start-ups, academics, and strategic partners.
Category Intelligence: Customized intelligence that is relevant to their supply Markets will enable them to make smarter sourcing decisions and improve their category management.
Public Company Transcript Analysis: To improve the investment performance by generating new alpha and making better-informed decisions.
Social Media Listening: To analyze the conversations and trends happening not just around your brand, but around your industry as a whole, and use those insights to make better Marketing decisions.
Global Office Real Estate Market Report Snapshots
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