Cushman & Wakefield Releases 2020 Global Office Impact Study

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  • Global study predicts
    office sector recovery to be slow, but full recovery expected despite
    work-from-home trend
  • Less affected by
    the work-from-home trend, Hong Kong office market is expected to see a certain
    level of momentum starting 2H 2021

HONG KONG, CHINA – Media OutReach
– 19 October, 2020 –
Cushman & Wakefield (NYSE: CWK), a leading global real estate services
firm, recently released its first-ever Global Office Impact Study, projecting
that the world’s office leasing fundamentals will be significantly impacted by
the COVID-19 recession and the work-from-home trend, but they will ultimately
begin to improve in 2022 and will fully recover by 2025. The full recovery
timeline is consistent with what was observed during the Great Recession, but
at a slight lag due to the work-from-home trend. The report was developed by
the firm’s newly organized Global Think Tank, a team of senior researchers and
economists from around the world. The study analyzed the cyclical and
structural changes impacting the global office market and the implications for

“We set out to answer the foundational and somewhat ambiguous question
of ‘what will become of the office’ by taking a deep, scientific look at the
forces created by this pandemic and the cumulative impacts on office sector
fundamentals,” said Kevin Thorpe, Cushman & Wakefield’s Chief Economist
and Global Head of Research.
“We’ve examined the collective impact of these
forces, including job losses, office vacancy and rental rates, geographic
characteristics, and work from home expansion, to establish future-looking
scenarios that, under our base case, ultimately project a full global office market
recovery. Of course, all real estate is intensely local, and not every local
market will follow the same path to recovery.

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Key findings from the
2020 Global Office Impact Study are concentrated on the full economic and
employment recovery anticipated for Q1 2022, and the corresponding demand for
office space as vacancies begin trending downwards and rental rates begin
appreciating. By 2025, global office vacancy is anticipated to return to
pre-crisis levels of approximately 11%, with rents returning to pre-crisis peak

“Even though the impact of work-from-home trends will slow the office
market recovery, the overall growth in office-using job sectors along with many
other factors — including agglomeration, culture/branding, and productivity —
collectively indicate that the office will continue to play an important role
in the economy going forward, said Rebecca Rockey, Global Head of
Forecasting at Cushman & Wakefield
. “With this study, we’re looking
into an uncertain environment through the lens of evidence, data, and science.”

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The study finds that increased flexible working and work-from-home
practices are less prevalent across Asia Pacific as a whole compared to
other regions and are unlikely to have meaningful alteration on the outlook for
the region’s office market. In Hong Kong, office demand will likely remain
driven by cost-saving relocations over the near-term. Keith Hemshall,
Cushman & Wakefield’s Executive Director & Head of Office Service, Hong
said: “Should the Covid-19 vaccine be available by mid-2021, we expect
the market to regain some positive momentum in the second half. Leasing
activity is likely to be concentrated in upcoming new developments that offer high
quality specifications and attractive commercial terms for pre-commitment.  Some of the key developments including Two
Taikoo Place (Swire Properties) in Quarry Bay, AIRSIDE (Nan Fung Group) in Kai
Tak, 98 How Ming Street (Sun Hung Kai Properties) in Kwun Tong and 91 King Lam
Street (New World Development) in Cheung Sha Wan will draw significant tenant
interest.” In view of this, Cushman & Wakefield forecasts the city’s Grade
A office net absorption will return to a positive level in 2022, amounting to
around 1.1 million sq ft.

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However, from a Landlord perspective, the 3.8 million sq ft of new
supply forecast for 2022 will be the highest annual total on record and will
exert significant downward pressure on rents. Eric Chong, Associate Director
of Research Hong Kong, at Cushman & Wakefield
, said: “Despite a
positive take-up forecast in 2022 and 2023, landlords in the city are likely to
come under increasing pressure due to these large-scale new developments
entering the market. We expect average rentals in Overall and Greater Central
to decline by 25-30% and 32-37% between Q3 2020 and Q4 2023 before bottoming
out in 2024.”  

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The 2020 Global Office Impact Study is the first of a four-part series,
which will provide a new and thoughtful look into the future of the office, and
the role it will play in a post-pandemic environment.

Read the 2020
Global Office Impact Study here

About Cushman & Wakefield

Cushman & Wakefield (NYSE: CWK) is a
leading global real estate services firm that delivers exceptional value for
real estate occupiers and owners. Cushman & Wakefield is among the largest
real estate services firms with approximately 53,000 employees in 400 offices
and 60 countries. Across Greater China, there are 22 offices servicing the local
market. The company won four of the top awards in the Euromoney Survey 2017 and
2018 in the categories of Overall, Agency Letting/Sales, Valuation and Research
in China. In 2019, the firm had revenue of $8.8 billion across core services of
property, facilities and project management, leasing, capital markets,
valuation and other services. To learn more, visit
or follow us on LinkedIn (

Cushman & Wakefield Releases 2020 Global Office Impact Study

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