Chart of the Day: CBD and city fringe offices rent gap to widen to 30% in 2023

City fringe rents are expected to grow 2.4% from 2019-2023.

This chart from Colliers International reveals that the rental gap between central business district (CBD) and city fringe grade A offices is set to widen to almost 30% by 2023, after expanding to 22% in Q3 2019.

Also read: Rental gap between CBD and fringe offices widens to 22%

City fringe grade A office rents have climbed 18.4% YTD to $7.9 per sqft per month (psf pm) as of September since the last low of Q2 2017. Colliers also forecasted a stable rental growth of 2.4% compound annual growth rate (CAGR) from 2019-2023 (4% in 2019 and 2% in 2020) as supply remains tight.

City fringe grade A offices offers a cap rate of 3.7%-4% as of Q3, compared to the 3.15%-3.50% cap rate for CBD Grade A offices.