CBRE: 10 most expensive office markets of the globe

22 December 2014

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.

Top 10 Most Expensive Markets

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%).

Top 5 Decreases and Increases 

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.”



Ensuring data quality imperative for smart asset management

25 March 2019

By implementing innovative Asset Performance Management systems, utilities firms can maximise their utilisation of assets and minimise maintenance costs across their portfolio. However, according to Louis Morgan of Smart Grid Forums, without securing quality management systems for the data which smart grids rely upon, companies risk missing out on the benefits of asset performance grids.

Smart asset management presents a major opportunity to professionals across the business spectrum. In this context, a new event hosted in London is looking to help smart-grid asset management professionals meet the needs of a changing energy industry with digital asset management. The first annual Grid Asset Management event is due to take place between the 14-16th of May 2019 at the Millennium Hotel in Knightsbridge, London.

The conference will bring together leaders and experts from across Europe, in order to benchmark their digitalisation roadmaps. In a piece posted on the Smart Grid Forums website ahead of the event, Louis Morgan, a Conference Producer at Smart Grid Forums, has outlined the importance of investing in innovative asset performance technology for utilities firms, which can help ensure long-term stability for assets management in the utility sector in the face of increased complexity  .

Ensuring data quality imperative for smart asset management

Traditionally, the decision to invest in a given asset was made on the basis of an expert’s judgement of the risks posed by its failure, having typically been assessed via a risk matrix or a similar qualitative method. After that, a decision would be taken as to whether it should be replaced. However, according to Morgan, as the pace of change and complexity increases, these methods can no longer provide the required level of certainty. Uncertainty about changes to consumption patterns and load profiles brought on by the energy transition produces a vast number of possible scenarios that investment planners must consider.

As a result, Morgan explained, “utilities are seeking to support their investment decisions with quantitative risk management methods, centralising expertise from across their operations into a consistent, numerical framework that accurately captures the risk posed by all kinds of asset failure to all stakeholders.”

Companies are doing this by turning to ‘smart grid’ utility management, or systems which work to invest in the maintenance and replacement of millions of assets spread across thousands of kilometres of network. However, this is by no means a silver bullet, and in the age of the smart grid, planning ahead is more complex than ever. To ensure the long-term stability of their grids, then, utilities must deploy standardised investment decision-making practises supported by advanced modelling capabilities.

Morgan elaborated that the best way of facing this problem is through the combination of condition, utilisation, reliability and demand data. In that case, risks can be quantified in financial terms and investment budgets can target the assets posing the highest total risk, thus deferring investment in lower risk assets and optimizing the long-term budget. However, decisions informed by these risk models “will only be as good as the data and the assumptions that support them”, meaning utilities must therefore find ways to improve the volume, variety, veracity and velocity of the data they employ in their investment planning models.

“This means digitalizing asset operations, rolling out sensors and implementing systems that integrate data from a range of internal and external sources in real-time,” Morgan expanded. “Utilities must also scour their business for expertise about different assets to ensure that their risk management frameworks accurately capture the true risks posed by asset failures.”

This is in keeping with a trend which goes well beyond utilities. Business leaders of all shapes and sizes are currently having to address how they manage data quality – as poor information being input into any automated system can essentially negate the efficiencies such systems bring to the table. To this end, robust data governance is critical.

Concluding his article, Morgan said, “It is clear that there is a great deal of opportunity for utilities to obtain significant business benefits from improving their investment planning capabilities. More accurate risk management, supported by a reliable data-driven method, will deliver better financial outcomes from investment activity... But to achieve these capabilities, a lot of work must be put in to establish the systems, processes and frameworks which underlie them. Utilities must also make difficult choices about how they quantify risk and the appropriate range of data to feed into their investment planning models.”

This topic will be tackled in-depth at this year’s Grid Asset Management 2019, a conference, exhibition and networking forum aimed solely at smart grid asset management professionals.