'Offices Aren't Dead': How Brokerages Are Turning An Overseas Boom Into A Payday

Major American commercial real estate brokerages are slowly coming around to the fact that office usage in most downtowns is unlikely to return to its former glory of driving revenue and opening opportunities for hard-charging brokers.

They are undeterred.

Rather than navel-gazing, CRE’s biggest companies are looking abroad to markets in Asia and Europe, which are growing their office markets at a sometimes ferocious clip.

“It’s surprisingly upbeat, given all of the negativity that we've got in U.S. office,” CBRE Global Chief Economist and Global Head of Research Richard Barkham told Bisnow. “The global picture is surprisingly upbeat.”

CBRE is among several American CRE firms that extolled the upsides of office leasing in Asia and the European Union.

“Our Japan and India businesses have grown to the point where they are the second- and fifth-largest contributors to advisory [segment operating profit],” CBRE CEO Bob Sulentic said on his company’s third-quarter earnings call.

He also expects those countries to be “disproportionate contributors to CBRE's future growth.” 

CBRE’s global leasing revenue surged 19%, with a 28% leap from Europe, the Middle East and Africa. As part of the increase, advisory services profits jumped 50%. 

JLL also called attention to its Indian market performance on last quarter’s earnings call and plans to focus more on senior living and warehousing as it expands there. 

Activity in Europe is “the healthiest I’ve seen in six years,” said JLL Head of EMEA Markets Research Alex Colpaert, who predicts 10% year-over-year growth in office leasing volume in 2025 across the continent. 

The vacancy rate for office space remains a healthy 8.5% in Europe, well below the 20% average in the U.S. The Middle East has also seen “very healthy levels of transaction,” Colpaert said. And in Asia Pacific markets, while China’s property market has crashed, other countries like Vietnam and South Korea have picked up the slack.

​​“In the past, the Asia story has been dominated by China,” Jeremy Sheldon, head of Asia Pacific markets at JLL, told Bloomberg. “Now it’s, ‘OK, China is still incredibly important, but what else is out there?’”

The reasons behind this surge — and the corresponding opportunities for brokers and consultants across the world — varies considerably depending on the region. 

In many parts of Asia, remote work was never really embraced, Barkham said. In addition, countries like the Philippines have also seen significant growth in outsourcing, leading to more demand for workspaces and development. 

In Europe, there is a rush to develop Class-A space, just like in the United States. But development is much more tied to sustainability and transportation, namely proximity to public transit. 

Colpaert sees a big opportunity in transit-adjacent projects and more sustainable office space. Based on his calculations on corporate net-zero carbon commitments, there is three times more demand for energy-efficient office space than currently exists in the market.

Perhaps one of the biggest success stories right now is India. Bolstered by massive manufacturing and tech growth, the country's economy has boomed with enough real estate activity to make the “office to the world” tagline seem more accurate than ever. 

“You know, offices aren’t dead,” Barkham said. “If you want to see the future of offices, go to India. Emerging-market offices are driven by high-growth development of the service sector and a boost from outsourcing.”

In Q3, tenants in the office market leased a record 19M SF, and rents are set to increase in Bangalore, Hyderabad and Delhi. During the first half of the year, 60% of leasing in the country came from global firms looking to expand their business in India, with an estimated 42% of office leasing from American companies alone. 

In Q2, the country opened 11M SF of new office space, three times more than during a similar period in the U.S. With rents surging in all seven main cities, it is almost guaranteed there will be more transactions and leasing in India in 2024 than 2023.

“With India remaining at the forefront of global firms’ RE plans and domestic economy remaining resilient, occupier activity remains on an accelerated growth curve with an anticipated longer runway going forward as well,” JLL India Head of Research Samantak Das said in a statement. “As India builds on its services economy platform and makes a play for the global manufacturing pie, the office market is poised to ride the tailwinds of the strong economic story and propel itself to greater heights.”

India has been a focus of competing firms like Colliers and JLL. Investment giants like Blackstone, Brookfield and Ivanhoé Cambridge have all made big bets on Indian property in the last few years. 

In the previous quarter, 44% of India’s record 19M SF of leasing came from global capacity centers. Formerly viewed as simply back-office support for overseas firms, these workspaces now function as tech hubs for firms like JPMorgan Chase and Goldman Sachs. Dak sees them as central to office expansion in the country.

For brokerages like CBRE, taking advantage of the growth of the office market overseas has been a payoff after years of investment, acquisitions and staffing strategy. CBRE has invested in professional services and consulting for years, enabling it to ride the wave of professional services and outsourcing growth in India.

Regional CEO Anshuman Magazine has been part of CBRE for decades and helped launch professional brokerage services in India in 1994, with an office in the Connaught Place financial hub of New Delhi. For decades, CBRE played a role in outsourcing to markets like India, and the company noted in its 2012 annual report that it was highly ranked by the International Association of Outsourcing Professionals.

Now, the firm boasts 15-plus offices and more than 10,000 employees across the country, and it has helped 25 of the top 40 global retail brands transact there. CBRE has focused on hiring and building up its tech talent in India, announcing earlier in the fall that it aimed to expand its 1,500-strong tech workforce, dedicated to artificial intelligence and other software for the firm, by 30% in the next few years.

“We've got these two businesses in India and Japan that have become quite prominent for us,” Sulentic said on the Q3 call. “An awful lot that we've barely gotten started with in those two markets. We've got great leadership teams there. We expect them to be able to grow significantly on a double-digit basis for years to come.”