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International Financial Centres, Office Market Rents And Volatility

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  • Colin Lizieri

Abstract

Despite continuing developments in information technology and the growing economic significance of the emerging Eastern European, South American and Asian economies, international financial activity remains strongly concentrated in a relatively small number of international financial centres. For example, BIS figures suggest that 85% of foreign exchange transactions and 77% of international debt issuance take place in just ten centres; the top five stock exchanges account for 61% of global equity market capitalisation. That concentration of financial activity requires a critical mass of office occupation and creates demand for high specification, high cost space. It also links the office markets of those cities into a network of global capital flows with impacts on volatility and drivers of risk which, in turn, has implications for diversification and portfolio strategy. This paper examines office rents and capital values for a sample of world cities in relation to city size, national economic aggregates, geographical location and economic function using a range of statistical techniques and seeks to explore the linkage between global financial activity and property market volatility.

Suggested Citation

  • Colin Lizieri, 2008. "International Financial Centres, Office Market Rents And Volatility," ERES eres2008_197, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:eres2008_197
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    File URL: https://eres.architexturez.net/doc/oai-eres-id-eres2008-197
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    References listed on IDEAS

    as
    1. C.F. Sirmans & Elaine Worzala, 2003. "International Direct Real Estate Investment: A Review of the Literature," Urban Studies, Urban Studies Journal Limited, vol. 40(5-6), pages 1081-1114, May.
    2. Cassis,Youssef, 2006. "Capitals of Capital," Cambridge Books, Cambridge University Press, number 9780521845359, September.
    3. Colin Lizieri & Andrew Baum & Peter Scott, 2000. "Ownership, Occupation and Risk: A View of the City of London Office Market," Urban Studies, Urban Studies Journal Limited, vol. 37(7), pages 1109-1129, June.
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    6. Richard J. Herring & Susan Wachter, 1999. "Real Estate Booms and Banking Busts: An International Perspective," Center for Financial Institutions Working Papers 99-27, Wharton School Center for Financial Institutions, University of Pennsylvania.
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    More about this item

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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