Prime office rents in key Chinese and Brazilian cities will continue their economic growth-fuelled rise in 2011, a survey said, prompting global property investors to chase deals in those emerging markets.
A report by property consultancy Cushman & Wakefield said prime office rents in Hong Kong's central business district rose 50 percent last year, followed by Beijing with a 48 percent rise and Rio de Janeiro with 47 percent.
Overall, global prime office rents rose 1 percent in 2010 on average, rebounding from an 11 percent fall in 2009, on the back of stronger demand fuelled by increasing business activity, the report said.
With fierce competition amongst tenants for limited prime office premises in Hong Kong, it is expected that grade A office rents in the central business district will be driven upwards by 20 to 25 percent over the next 12 months, said John Siu, the company's executive director for Hong Kong.
A spokesman for the company told Reuters prime office rents in Beijing and Rio de Janeiro would continue to rise in 2011, albeit at a slower pace.
China's racing economic growth is expected to moderate slightly to 9.3 percent in 2011, while Brazil's economy was seen up between 4.5 percent and 5 percent this year.
Pramerica Real Estate Investors, a unit of U.S.-based Prudential Financial, said this week it was targeting commercial property in China and Brazil with two new ventures?
My general philosophy with China is that if you can pick one thing and do it really well you can over 20 years have a very substantial business, chief executive Allen Smith said.
Last June, HSBC Alternative Investments, part of HSBC's private banking unit, said it was looking for deals in Brazil, ranking the country as one its top investment destinations.
Prime office rental growth in Europe was also positive last year, led by London's West End theatre district, which had a 25 percent rise. In New York rents rose 10 percent, the Cushman & Wakefield report said.