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Madrid leads the Global Cities
Madrid leads the Global CitiesAdvanced economy cities to lead office rental growth in the coming years.

This years Global Cities report, a study of the real estate markets of the worlds leading business centres, argues that the coming years will see rising opportunities for real estate investors in advanced economies. This is because the recent falls in commodity prices, that are adversely impacting emerging markets, will increase spending power for firms and consumers in the west, and buoy economic growth.

Madrid is forecast in the report to see the highest office rental growth in the next three years, as its economy continues to recover at a time when supply is constrained in the CBD. The strongest forecast rental growth in the Americas is expected to occur in San Francisco, a city that continues to ride the digital technology wave. Similarly, rising tech demand is buoying office demand in London, where rents are forecast to rise by 13.6% in the three years to 2018.

A new post-crisis landscape in the office market is apparent in Spains capital
Despite being emerging markets, the Indian cities of Mumbai and Bengaluru sit high in the rental growth ranking. This is partly because Indias IT and outsourcing industries are expected to benefit from rising demand from western corporations. Also, India is currently overtaking China in the rate of GDP growth.

Bengaluru (formerly Bangalore) has benefited the most from Indias unprecedented growth in e-commerce
Below is the full rental growth forecast ranking:
Forecast Office Rental Growth (end of 2015 to end of 2018)

City %
1 Madrid 22.2%
2 Mumbai 21.3%
3 San Francisco 20.2%
4 Melbourne 15.8%
5 Bengaluru 15.8%
6 London 13.6%
7 Los Angeles 12.5%
8 Hong Kong 12.0%
9 Paris 9.8%
10 Chicago 9.3%
11 Washington DC 8.5%
12 Sydney 7.7%
13 Shanghai 6.1%
14 New York City 5.8%
15 Tokyo 5.3%
16 Delhi 5.0%
17 Frankfurt 3.5%
18 Mexico City 1.5%
19 Beijing 1.8%
20 Singapore -3.0%

Source: Knight Frank, Newmark Grubb Knight Frank, Sumitomo Mitsui Trust Research Institute
The report also looks at the new wave of offices around the world where desks are being displaced by sofas. The impact of a series of mega infrastructure projects on real estate demand is examined. Plus, five future trends in property investment are identified.
Madrid leads the Global Cities
Published: 30.11.2015

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