London is once again the most expensive office market in the world, a survey by CBRE shows. The top five is dominated by Asian markets, taking three out of five places, and closed by Moscow. The biggest increase in price is found in Dublin and the biggest decrease in Santiago. The consulting firm expects the occupancy costs to continue to rise, as these costs mirror the recovery of the global economy.
Commercial property and real estate services consulting firm CBRE recently released the results of its semi-annual ‘Global Prime Office Occupancy Costs’ survey for which it tracks the occupancy costs for prime office space in 126 markets around the globe. The study revealed the top 50 most expensive office markets in US dollars per square feet per annum.
The research shows that London’s West End remained the world’s highest-priced office market with a rate of $273.63 per square feet per year, followed by Hong Kong – Central ($250.61 per square feet) Beijing – Finance Street ($197.75), and Beijing – Central Business District ($189.39). The top five is closed by Moscow, with $165.05. Asia not only dominated the top five, but is also well-represented in the top 10, with an additional four rankings: New Delhi is found on the sixth place ($158.47), Hong Kong – West Kowloon on seventh ($153.65), Tokyo on ninth ($136.46), and Shanghai rounds out the top 10 with $127.89 per square feet per annum.
The survey also identified the markets with the largest annual changes in occupancy costs in local currency and measure. The biggest rise found in the Dublin, which saw an increase in costs of 34.9%, followed by Manila (20.7%) and Seattle (20.5%). Again, the top five is dominated by Asia, with Kuala Lumpur on fourth and Singapore on fifth place, with increasing rates of around 16%. The biggest decreases are found in Santiago, which saw a decrease of 13.5%, followed by Lyon (-10.8%), Hong Kong – West Kowloon (-9.8%), Bangalore – Central Business District (-8.5%), and Palma de Mallorca (-7.8%).
The global average for prime office occupancy costs rose 2.5% year-over-year. According to CBRE, this mirrors the gradual, multi-speed recovery of the global economy. “We expect the gradual recovery of the global economy to continue, leading to better hiring rates and further reduction in the availability of space across most markets over the near term,” says Richard Barkham, Global Chief Economist at CBRE. “In this environment, we expect occupancy costs to continue rising from current levels, further limiting options for occupiers. Technology, quality and flexibility are expected to increasingly come into consideration in space use and location decisions, as occupiers will seek to contain costs and improve productivity.”