A new report just released by Knight Frank has revealed that international prime rents fell marginally by 0.4% in 2016.
This compares to 2.5% growth reported by the same index two years ago.
While the general trend in the 17 key cities tracked in Knight Frank’s Prime Global Rental Index was for rental declines last year, there were areas of positive performance.
Ten cities recorded rental growth over the course of 2016 up from seven in 2015. At the same time the difference between the strongest and weakest-performing markets increased to 14% – up from 12.5% in 2015.
Toronto led the company’s ranking with prime rents growing by 8% year-on-year. This rise comes despite a fall in the volume of tenancies agreed over the course of the year caused by a lack of supply in the apartment rental market.
Nairobi remained the weakest-performing market for the fourth consecutive quarter with rental values falling by 6% last year. However, in the last quarter of 2016, prime rents were unchanged, suggesting declines may have started to bottom out. This trend is further supported by a steady increase in oil prices over the past few months.
North America continued to be the strongest performing world region for the fifth consecutive quarter according to the firm, with average annual prime rental growth of 5.2%. Europe displaced Africa as the weakest-performing region with prime rents falling 2.1% in 2016.
