A Global Office Rents Survey by CB Richard Ellis Group released today noted that the central business district in Hong Kong "recorded the fastest year-over-year occupancy cost rise with a 34.2 percent increase.
The survey found that London's West End continues to be the world's most expensive office market, followed by Hong Kong, the Inner Central district of Tokyo, Mumbai and Moscow.
"Major markets in emerging economies feature prominently at the top of the list of most expensive office costs as measured in dollars per square foot," said Dr. Raymond Torto, CBRE's Global Chief Economist. "This pattern developed just a few years ago and it is more pronounced today."
Of 175 districts surveyed, 61 saw occupancy costs for the year rise but "the year-over-year change in office occupancy costs for the 175 markets monitored revealed a drop of only 1.3% worldwide."
London's West End is still the world's most expensive market with an occupancy cost of $193.69 per sq. ft., up from $182.94 per sq. ft. six months ago. Other markets in the region that top the list are Moscow (occupancy cost of $128.33 per sq. ft.), London (City) ($124.59 per sq. ft.), Paris ($115.72 per sq. ft.), and Dubai ($95.32 per sq. ft.).
Hong Kong (Central CBD), with an occupancy cost of $184.21 per sq. ft. (up from $153.20 per sq. ft. six months ago), was first in the region followed by Tokyo's Inner Central, with an occupancy cost of $158.08 per sq. ft. Mumbai, with an occupancy cost of $130.41 per sq. ft., ranked third in the region.
North America was led by Midtown New York, which posted an office occupancy cost of $66.59 per sq. ft. While office occupancy costs in Midtown New York are high for North America, that market ranked just 26th globally.
North American markets, for the most part, have not seen occupancy costs begin to recover yet, the report maintained, adding that less than one-third of North American office markets experienced increases in occupancy costs over the past year. Atlanta (CBD) experienced the largest year-over-year increase, at 7.0%. New York, the largest office market in the U.S., saw occupancy costs decline by 7.6% (Downtown) and 4.5% (Midtown). Fifty-five of these markets experienced declines and 21 markets saw occupancy costs for the year rise.
In Latin America, S¿o Paulo, which ranked just ahead of Rio de Janeiro, remains the most expensive market, posting an office occupancy cost of $109.03 per sq. ft. S¿o Paulo now ranks as the 9th most expensive market globally. Meanwhile, with an occupancy cost of $104.40 per sq. ft., Rio de Janeiro has moved into the global top 10 on the strength of its local premium office market combined with the appreciation of the Brazilian real against the U.S. dollar over the past year.
The survey found that London's West End continues to be the world's most expensive office market, followed by Hong Kong, the Inner Central district of Tokyo, Mumbai and Moscow.
"Major markets in emerging economies feature prominently at the top of the list of most expensive office costs as measured in dollars per square foot," said Dr. Raymond Torto, CBRE's Global Chief Economist. "This pattern developed just a few years ago and it is more pronounced today."
Of 175 districts surveyed, 61 saw occupancy costs for the year rise but "the year-over-year change in office occupancy costs for the 175 markets monitored revealed a drop of only 1.3% worldwide."
London's West End is still the world's most expensive market with an occupancy cost of $193.69 per sq. ft., up from $182.94 per sq. ft. six months ago. Other markets in the region that top the list are Moscow (occupancy cost of $128.33 per sq. ft.), London (City) ($124.59 per sq. ft.), Paris ($115.72 per sq. ft.), and Dubai ($95.32 per sq. ft.).
Hong Kong (Central CBD), with an occupancy cost of $184.21 per sq. ft. (up from $153.20 per sq. ft. six months ago), was first in the region followed by Tokyo's Inner Central, with an occupancy cost of $158.08 per sq. ft. Mumbai, with an occupancy cost of $130.41 per sq. ft., ranked third in the region.
North America was led by Midtown New York, which posted an office occupancy cost of $66.59 per sq. ft. While office occupancy costs in Midtown New York are high for North America, that market ranked just 26th globally.
North American markets, for the most part, have not seen occupancy costs begin to recover yet, the report maintained, adding that less than one-third of North American office markets experienced increases in occupancy costs over the past year. Atlanta (CBD) experienced the largest year-over-year increase, at 7.0%. New York, the largest office market in the U.S., saw occupancy costs decline by 7.6% (Downtown) and 4.5% (Midtown). Fifty-five of these markets experienced declines and 21 markets saw occupancy costs for the year rise.
In Latin America, S¿o Paulo, which ranked just ahead of Rio de Janeiro, remains the most expensive market, posting an office occupancy cost of $109.03 per sq. ft. S¿o Paulo now ranks as the 9th most expensive market globally. Meanwhile, with an occupancy cost of $104.40 per sq. ft., Rio de Janeiro has moved into the global top 10 on the strength of its local premium office market combined with the appreciation of the Brazilian real against the U.S. dollar over the past year.
Architecture Critic
Carter Horsley
Since 1997, Carter B. Horsley has been the editorial director of CityRealty. He began his journalistic career at The New York Times in 1961 where he spent 26 years as a reporter specializing in real estate & architectural news. In 1987, he became the architecture critic and real estate editor of The New York Post.
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