• Slowdown in Emerging Markets Hits Prime Residential Rents

    8 July 2015

    7 July 2015 (Hong Kong) – Knight Frank releases its Prime Global Rental Index Q1 2015 which recorded marginal growth of 1.3% in the year to March, its slowest rate of growth since the first quarter of 2010.

    Results for Q1 2015:

    The index rose by 1.3% in the year to March 2015, down from 3.5% a year earlier

    Tokyo leads the annual rankings for the second consecutive quarter with prime rents up 8.1%

    Hong Kong ranked 6th, with 2.2% year-on-year increase in prime rents

    Cities in emerging markets such as Nairobi and Dubai have seen a slowdown in rental growth

    Africa and North America recorded the strongest rise in prime rents of the world regions, rising on average by 4.3% and 3.2% respectively on an annual basis

    Dubai recorded its first quarterly fall in prime rents since 2011, down 0.6% in the first three months of 2015

    Kate Everett-Allen, Partner at Knight Frank Residential Research, says, “The health of the global economy will determine the future direction of the index. The immediate concern is how the Greek crisis plays out but in the long term the problem will be finding a new engine to stimulate growth, be it the US, China or recovering emerging markets.”

    Knight frank 2013

    Nicholas Holt, Asia Pacific Head of Research, comments, “On an annual basis, the Prime Global Rental Index’s best and worst performers were in Asia. Tokyo, at the top of the list with a 8.1% uplift, continues to benefit from improving economic fortunes, as it posted 3.9% GDP growth in the first quarter of 2015, the best performance since the introduction of last year’s consumption tax rise. On the other end of the scale, Beijing saw its prime rents slide by 7.0% on an annual basis, as the Chinese slowdown continues to impact real estate performance.

    Going forward, we expect these polarised results in the region to persist, as significant economic divergence continues to influence demand for employment in the region’s key hubs.


     

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