A Closer Look at Co-Movements in Global Office Rents

Abstract

Do office rents across the globe move together? This is a question that should concern not just investors in real estate but also corporate occupiers with offices across regions and countries. This analysis investigates the existence of co-movements across global office markets by performing principal components analysis on a unique dataset of prime office rents in 32 global office markets. Results suggest that while rents in most markets appear to be driven by a common factor, regional and other differences persist, suggesting potential for diversification.