According to the latest Prime Global Rental Index report released by Knight Frank, prime residential rents around the world rose by 6.4% in the year to September in 2013, the index’s strongest annual performance since Q2 2008. Kate Everett-Allen, Partner, International Residential Research at Knight Frank says the Prime Global Rental Index looks to be mirroring the upturn in global economic sentiment; it now stands 22.4% above its low in Q2 2009 and 11% above its pre-crisis high in Q2 2008. However, Hong Kong prime rents declined by 0.5% in the year to September.
Highlights for Q3 2013:
• Knight Frank’s Prime Global Rental Index rose by 6.4% over a 12-month period and by 1% in the three months to September.
• Nairobi topped the annual rankings for the second consecutive quarter.
• Zurich and Moscow recorded the largest rise in prime rents over the third quarter.
• Of the Chinese cities tracked, Beijing recorded the strongest annual increase in the year to September, with rents ending the period 8.1% higher.
• The financial centres of London and Hong Kong were the weakest performers with prime residential rents declined by 2.5% and 0.5% respectively in the year to September.
• Knight Frank expects modest rises in prime rents in cities such as London and New York in 2014 due to rising borrowing costs and improving employment prospects.
Thomas Lam, Director and Head of Research & Consultancy, Greater China at Knight Frank, expects prime residential rents in Hong Kong to slip a further 5-10% in 2014 as leasing supply increases due to the numerous cooling measures suppressing the sales sector.