London remains costliest office market, survey says
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LONDON’S West End remained the world’s most costly office market while Beijing’s Finance Street and Central Business District ranked third and fourth, according to a semi-annual survey released yesterday by global commercial real estate adviser CBRE.
Hong Kong’s Central ranked as the second most expensive office market.
Overall occupancy costs in London’s West End stood at US$2,964 per square meter per year, immediately trailed by Hong Kong’s Central where total occupancy costs reached US$2,590 square meter, the survey found.
Beijing’s Finance Street, Beijing’s CBD and Moscow rounded out the top five markets with occupancy costs of US$2,076, US$2,001 and US$1,766 per square meter per annum, respectively, according to CBRE.
The company tracks occupancy costs for prime office space in 126 markets around the globe.
“The escalation of commercial rent has been attributed partially to the increase in demand from both foreign and domestic occupiers alongside limited supply in the core markets in Beijing,” said Sean Lim, senior director, head of landlord services of CBRE China. “This ‘landlord’s market’ phenomenon is likely to continue for the next 12 to 24 months. Occupiers who had historically been located in the city center are beginning to consider decentralized locations as a more cost effective option while high growth domestic occupiers are also recognizing the benefit of a prime business address and are willing to pay a premium rent as part of corporate rebranding.”
Asia Pacific had 20 of the 50 most expensive markets including six in the top 10. Shanghai’s Pudong and Puxi ranked No. 12 and No. 14, respectively with prices of US$1,262.6 per square meter per year and US$1,177 per square meter per year.
Guangzhou finished 38th.
CBRE’s study also found that rents are rising fastest in the Americas, where real estate fundamentals continue to improve significantly. The US accounted for five of the 10 markets with the fastest growing occupancy costs, according to the survey.
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