Knight Frank, the independent global property consultancy, today releases its Prime Global Rental Index Q4 2014 which saw a notable slowdown this quarter. On an annual basis, the index rose by just 0.6% in 2014 – its weakest rate of growth since 2009.
- Tokyo leads the rankings with luxury rents ending the year 11.1% higher. Japan emerged from recession at the end of 2014 and the economy is forecast to rise by 1.3% in 2015 and 2% in 2016. Central wards such as Chiyoda and Minato are seeing a rise in tenant demand due to strong population growth and expat demand.
- In Hong Kong the potential interest rate rise in the US and the continuation of cooling measures meant more landlords chose to rent their property rather than sell in 2014, adding to rental supply and suppressing rental growth.
- Singapore is the only key financial centre where luxury prices and luxury rents declined in 2014.
Kate Everett-Allen, Partner at Knight Frank Residential Research, says, “The weak index results underline the global economy’s fragility in 2014 but hides the fact that 12 of the 17 cities we cover saw luxury residential rents increase or remain static in 2014.
“Demand and activity in the prime residential rental market is strongly linked to business activity and employment levels. Events in Europe will be critical to the overall index’s performance in 2015 with significant areas of concern still being addressed in the region’s economy. Although a ‘Grexit’ remains a possibility, business activity in the Eurozone is now close to a four-year high and deflationary pressures have eased partly due to higher wages suggesting a more positive outlook for 2015.”
Looking at Asia Pacific, Nicholas Holt, Head of Research at Knight Frank Asia Pacific, says, “The economic slowdown in China remains a concern across the world considering the growing connectivity of the Chinese economy. With macro-“uncertainties” looming over 2015, we take a conservative view on the performance of the index in 2015.”
For further information, please contact:
Ms Rachel Loke, Head of Asia Pacific Public Relations & Communications
firstname.lastname@example.org +65 6429 3587 @knightfrank