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

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