Race for quality space spans global property markets

Demand for high-quality offices and competition for industrial space are reshaping commercial property markets across the globe, according to David Lockwood, chief executive officer of the Society of Industrial and Office Realtors (SIOR).

SIOR’s 4,100 members span 725 cities in 52 countries, giving the organisation a broad perspective on market conditions. Lockwood said the pace of change was exceptional across both office and industrial property.

“And no matter whether it’s office space or industrial space, we’re in an evolution of the market like we’ve never seen occurring so rapidly.”

Companies are demanding very high-quality office space in many markets, while data centres, logistics businesses and manufacturers are competing for industrial space.

“There is a race for quality space across the globe.”

However, the strength of demand and the pace of recovery vary between locations. Some markets are performing strongly, while others are still recovering.

“Not all markets are as good as some markets, but there are some markets that are doing extremely well, and then there are some markets that are still in a recovery phase.”

Financing costs remain a challenge despite continued investor appetite for commercial property. Lockwood warned that higher interest rates could restrain investment for a time.

“Commercial real estate is still a very highly sought after investment, but we have challenges with the cost of funds, the lending rates across the globe, and the rise in interest rates may hinder that investment for a period of time.”

Despite those financing pressures, Lockwood maintained that commercial real estate remained a solid choice for investors.