Knight Frank Prime Global Rental Index
Prime residential rental growth weakest in world’s top financial cities
Key Highlights – Results for Q1 2014:
- Prime Global Rental Index rose by 4.7% in the year to March 2014
- Nairobi topped the annual rankings for the fourth consecutive quarter
- Prime rents declined in Singapore, London and Hong Kong in the year to March 2014
- Dubai and Tokyo recorded the strongest rise in prime rents in the first quarter of 2014
- Rising interest rates could push would-be buyers into prime rental markets in cities such as London and New York in 2015
Kate Everett-Allen, Partner, International Residential Research at Knight Frank, said, “The key risks for the world’s sales markets could emerge as catalysts for growth in terms of prime rents.”
- Prime rents in the Kenyan capital, Nairobi, increased by almost 26% in the year to March but there are signs the market is cooling with growth of only 2.1% recorded in Q1 of this year.
- Some of the world’s top financial centres – Singapore, London and Hong Kong – are positioned at the bottom of the rankings with annual falls of -0.3%, -2.0% and -6.3% respectively. However, we expect prime rental growth in these key cities to strengthen over the remainder of 2014.
- In London, the rental recovery looks to be taking hold as price growth starts to slow. New registrations are up 17% year-on-year and tenant demand is coming from a diverse set of industries – oil and gas, mining and IT.
- In Hong Kong, although there has been a relaxation of the Double Stamp Duty rule, a number of stringent cooling measures remain in place. With foreign buyers facing purchase costs of 25% of the sales price, the luxury rental market is attracting those deterred from buying, which should help support future rental growth.