The most expensive cities to rent office in skyscrapers

08 December 2015

Hong Kong is the most expensive city for renting an office space in a skyscraper, research by consultancy Knight Frank shows. New York is found on second place and Tokyo secures the third spot. London, which is currently found on fourth place, is closing in on the top 3 with the highest level of rental price growth recorded at almost 11%.

In its recently released ‘Global Cities: The 2016 Report’, global real estate consulting firm Knight Frank researches, among others, the cost of renting office space in tower buildings across key global cities to provide investors with a context for their investments.

Hong Kong is the world’s most expensive city when it comes to renting office space in a skyscraper, at $255.50 per sq. ft. New York is the second most expensive at $153.00, which is more than $100 cheaper than Hong Kong. According to the researchers, Hong Kong’s large lead can be attributed to a variety of factors, including the restricted geographic area of the city which forces developers to convert air into ‘land’ and build upwards. Tokyo completes the top three with prices of around $125.00 per sq. ft.

Most expensive cities to rent an office in skyscrapers

London, which is found on fourth place with prices of $122.00 per sq. ft., has experienced the highest level of rental price growth. Compared to six months ago, the price of office space in a tower building in UK’s capital increased by 10.7% to $122.00. This large increase is partly a result of a buoyant occupier market, which saw vacancy rates reach the lowest level since 2001. Skyscrapers in San Francisco saw the second largest increase in the rental prices of office space, at 8.2%, followed by Shanghai, at 5.3%. Two cities saw their rent costs drop; skyscraper rental prices dropped by 12% in Moscow to $79.00 and by 1% in Beijing to $67.00.

“Occupier confidence has obviously played a major part in the increase in tower rents achieved across most of the major global cities. However, the main point of interest is that this confidence has coincided with occupiers being more prepared to compete for space that was traditionally outside their preferred locations,” comments William Beardmore-Gray, Global Head of Office Agency at Knight Frank, on the increases in rental prices. “London is a good example where these locational barriers are being broken down with oil, tech and private equity companies relocating across London from their more traditional West End locations.”

Last year, consultancy CBRE conducted a similar research into the most expensive office markets of the globe. Their ranking, which was not exclusively skyscrapers, ranked London the world’s most expensive city, while Hong Kong was found on second place.


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.