_The key issues facing occupiers in Beijing, Dallas, Mexico City & Dublin

How will upcoming new supply reshape the occupier market in Beijing?

We estimate that Beijing will see approximately 35.5 million sq ft of grade A office space coming to the market between 2017 and 2021, mostly in the CBD. This means that the average annual supply in the next five years will reach 7.1 million sq ft.

However, in the past ten years, the annual average absorption of grade A space was 4.6 million sq ft. The challenge facing capital is whether the market can rapidly absorb the glut of supply ahead.

As occupiers will be spoilt for choice we believe that the balance of power in negotiations will switch from the landlord towards the tenant.

As the quality of the new office space is much higher, competition between new buildings to attract prospective tenants is fierce, especially in the CBD area. Build quality aside, good locat ion, and more importantly, incentives, discounts, and more flexible leasing terms will be factors in attracting occupiers.

David Ji, Head of Research & Consultancy, Knight Frank Greater China

What are the key factors drawing so many companies for the Dallas suburbs? 

Dallas’s market benefits from a business-friendly climate, strong economy and thriving population. Its diversified employer base allows for growth during varied business climates. The current cycle has so far seen the creation of more than 732,000 new jobs, roughly the population of Zurich, Switzerland, added to the economy.

Rapid tenant growth has resulted from the sheer number of corporate relocations and expansions currently underway, in addition to those announced for future occupancy.

The availability of land for corporate campuses, proximity to housing and depth of employee talent have made suburbs such as Frisco, Grapevine and Plano the destinations of choice for corporations, with nearly 100 such announcements made since 2015.

These developed and planned locations, including the “$5 Billion Mile” in Frisco, will add nearly 12 million sq ft of office space and are anchored by headquarters locations for JCPenney, FedEx Office, Liberty Mutual, State Farm and Verizon, among others.

Graham Hildebrand, Director of Research & Marketing - Texas, Newmark Knight Frank

Has the new Government in the U.S. impacted the willingness of international corporations to base operations in Mexico City? 

International firms in Mexico have maintained their growth expectations and investment plans. Perhaps those expectations are not as optimistic as they were in the previous decade, but most of these companies have decided to ride out the storm.

In the end, the ties between both economies are stronger than the actions any government may take to bring them down.

The Mexico City market has become more modern in recent years, with a number of state-of-the-art buildings that are attracting a growing number of foreign users, making asking rents highly competitive.

Occupiers are also taking into account such internal factors as space efficiency and financing options offered by developers. External factors, like access to public transportation, security and amenities, are also playing a major role in the occupancy of new space.

Today, the occupier market is driven principally by businesses in the telecommunications, financial and insurance industries.

Juan Flores, Director of Research – Mexico Newmark Knight Frank

How has the growing importance of the tech sector influenced occupiers trends in Dublin?

‘Flexibility’ has become a key word in the Dublin office occupier’s lexicon. Flexibility is highly valued in the tech industry due to the fast evolving nature of the sector which demands a high degree of adaptability to changing circumstances.

With tech accounting for the lion’s share of Dublin’s office take-up – Google, Facebook and Twitter all have their European Headquarters here – the industry has brought this emphasis on flexibility to Dublin’s occupier market.

As a result, landlords have had to react. Hence, we are seeing the traditional 25-year institutional lease of old giving way to more flexible terms of shorter duration.

The drive for flexibility is also influencing occupier fit-out habits, with activity based working and coworking culture set to take-off in a significant way. Lastly, tech employees are seeking the flexibility allowed by living close to work, which is driving demand for city centre apartment living.

John Ring,Head of Research, Knight Frank Ireland

Our office agency and tenant representation teams can provide expert advice to tenants and landlords across the global office market. We deliver real value through carefully formulated property strategies and robust negotiation, in prime business districts for landlords, multinational businesses and local occupiers.