CORFAC International Office Market Experts Cite Innovation and Technology as Primary Economic Drivers

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FALLS CHURCH, Va., July 28, 2014 (GLOBE NEWSWIRE) -- Throughout much of the U.S. and in global capitals, innovation and technology are driving office markets to some of the highest occupancy levels since the recession, reports Corporate Facility Advisors (CORFAC International),

Orange County, CA: In the second quarter of 2014, the Orange County office market posted over 740,000 square feet of positive net absorption, the most positive absorption seen in one quarter since the first quarter of 2007. The second quarter of 2014 marked the fifth consecutive quarter of rising lease rates.

As a whole, the Orange County office market has posted over 6.5 million square feet of positive absorption since the third quarter of 2010, 3.5 million of that in the last nine quarters, according to Voit Real Estate Services/CORFAC International, based in Irvine.

As the recovery continues, Voit's Vice President of Market Research, Jerry Holdner, noted that research-oriented businesses such as IT, defense, medical, and alternative energy are leading the charge for positive absorption in the Orange County office market.

Dublin, Ireland: The office market asserted its recovery in 2012, took off earnestly in 2013 and continued its positive growth trajectory during the first half of 2014, according to Paul Scannell, Directory of Office Agency with HWBC/CORFAC International in Dublin.

During the first two quarters of 2014, 95,912 square meters (approx. 1.03 million square feet) was positively absorbed. The absorption, or "take-up," is ahead of pace from the previous year when 1.9 million square feet of offices was absorbed in Dublin.

Major business brands, principally American technology firms, led the way with some of the largest office leases in Dublin so far this year.

Amazon (70,000 square feet), Dropbox (55,000 square feet), Oracle (31,000 square feet) and Groupon (17,000 square feet) were among the largest completed lease transactions in Ireland's biggest market thus far in 2014. This is consistent with 2013 deals in Dublin, in which Facebook leased 121,000 square feet, Yahoo 71,000 square feet and Salesforce over 50,000 square feet.

Dublin office rents soared with increased demand, rising as much as 50 percent from the fourth quarter of 2012. Current asking rates for Grade A (Class A in U.S. terms) are €430 - €485 per square meter annually, or approximately USD $50-$60 per square foot at current exchange rates. At the close of 2012, Grade A asking rents for Dublin office space were €320, or approximately USD $40 per square foot annually.

London, England: London's Farebrother/CORFAC International has created a new research category to replace the existing and commonly used grouping, 'TMT' (Technology; Media and Telecoms) that has become a major driver of leasing activity across Central London. Farebrother believes the 'TMT' acronym has lost its insightfulness for grouping too broad a group of occupiers and has replaced the research term with 'DAMIT' (Design; Advertising, Marketing & PR; Media; Internet and Technology & Telecoms) for a more in-depth analysis to fully understand occupier demand.

Collectively, DAMIT firms were the biggest drivers of leasing activity in London's Midtown and South Bank in the three years up to the second quarter this year, accounting for 40% and 46% respectively. In Midtown, the Internet has been the dominant sector in the last three years at 13%, with Legal and Professional Services occupiers close behind at 12%. In South Bank, take-up by the Media sector was strongest in the last three years at 19%, with Advertising, Marketing & PR at 15% and Professional Services close behind at 11%.

Leasing activity exceeded 600,000 square feet in Midtown, well above the five-year quarterly average of 475,211 square feet according to Farebrother's Julian Hind, Head of Leasing, Sales and Development. He added that, following a surge in take-up, the availability rate for the market had dropped below 4% for the first time in over a decade, the lowest vacancy in Central London.

South Bank experienced its strongest second quarter of take-up since 2007, 40% higher than the five-year quarterly average with an availability rate of 6.1% (4.3% excluding London's iconic building, The Shard).

Atlanta, GA: One of the largest leasing deals of late, excluding the 1 million square feet leased by State Farm for its relocation to the Central Perimeter market, was completed by apparel maker Carter's Inc. which moved its headquarters from Midtown to Buckhead in 222,728 square feet at The Phipps Tower. Other sizeable transactions were closed by Internet marketing companies (MailChimp, 109,000 square feet and Cardlytics, 75,000 square feet), both moving into the Atlanta's largest new mixed use project Ponce City Market. Meanwhile, one of the nation's biggest homebuilders, The Pulte Group, has leased approximately 100,000 square feet at Capital City Plaza for its planned headquarters' relocation from Detroit.

The Atlanta marketplace attracts so many major brands for corporate headquarters and satellite offices that it is impossible to attribute growth to just a handful of industries, according to Alan Joel, CCIM, and principal with Joel and Granot Real Estate/CORFAC International.

"The Southeast has been growing for years and Atlanta is the region's biggest city, so it naturally attracts a wide variety of businesses. Recent activity has lowered the office vacancy rate in the entire market by over a full basis point. Throughout Atlanta, there are few choices of contiguous space for office occupiers that require 100,000 square feet or more. If you're a large user, now's the time to make your move," Joel said.

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Source:CORFAC International