HONG KONG, LONDON AND NEW YORK TOP THE LIST
Hong Kong (Central) and London’s West End continue to command the highest prime office occupancy costs in the world, says CBRE Research’s annual Global Prime Office Occupancy Costs report.
Hong Kong central district’s overall prime occupancy costs of US$303psf (US$1 = RM4.30) is at the top of the “most expensive” list, followed by London’s West End ($214psf), New York (Midtown) (US$203psf), Hong Kong (West Kowloon) (US$190psf) and Beijing (CBD) (US$183psf).
Global prime office occupancy costs is calculated by factoring rent, local taxes and service charges for high-quality prime office properties. The overall index rose 1.9% year-over-year, with the Americas up by 3.6%, EMEA (Europe, Middle East and Africa) countries were up by 0.8% and Asia Pacific up 1.2%.
The report said Durban in South Africa had the highest increase in overall occupancy cost, while Stockholm (Sweden) registered the fastest growth in Europe. Other cities witnessing rapid price rises are Palma de Mallorca (Spain), Belfast (U.K.) and Amsterdam (Netherlands).
In the Asia Pacific region, Shanghai in China had the highest growth in occupancy cost, followed by Guangzhou, Bangalore and Shanghai.
Buenos Aires showed the biggest increase in the Americas overall, while suburban Denver, suburban Houston and New York Midtown South saw the largest occupancy cost increases in the United States.
The CBRE Research report tracked occupancy costs for prime office space in 121 markets around the world. Of the top 50 most expensive markets, 21 are located in Asia Pacific, 16 in EMEA and 13 were in the Americas.
Despite being in second spot, occupancy costs in London’s West End actually fell slightly as a result of a fall in rents, triggered by subdued demand among financial occupiers who have become less willing to pay the high rents prevailing in the city’s premier market.
Ironically, London City itself was pushed out of the top 10 most expensive markets to 11th place, despite prime office costs rising by 2.9%.
Closer to home, Singapore’s occupancy costs continued to fall, thanks to increased supply of office stock and weak levels of inflation.
However, the Asia Pacific region is home to seven of the top 10 most expensive markets, and Hong Kong (Central) is the only market in the world with a prime occupancy cost exceeding US$300psf.
The most expensive market in the global ranking from the Pacific Region was Sydney at US$97psf. It ranked 19th globally.
Below is a full list of the Top 50 most expensive office markets in the world: