London staff packed like sardines in world's most expensive offices

London has overtaken Tokyo as the most expensive business location for the first time in two decades, according to new research.

London has overtaken Tokyo as the most expensive business location for the first time in two decades, according to new research.

A report on global occupation costs by DTZ, the property consultants, has found that prime office space in the West End of London cost $158 (£111) per square foot (psf) a year in 2000.

The figure, up from $119 last year, is made up of rent and outgoings such as property tax and maintenance costs.

By comparison, the central five wards of Tokyo, the world's most expensive business location in 1999, cost occupiers $147 psf last year.

The City of London, at $126 psf, was the world's third-most expensive location, while Edinburgh came in at number 10, costing $63 psf.

Competing world financial centres were considerably cheaper than London, with New York City costing $80 psf and Frankfurt coming in at a mere $56 psf.

However, what London takes away in terms of raw occupancy costs, it gives back to employers by squeezing workers into smaller spaces than elsewhere.

John Forrester, global head of business space at DTZ, said that the amount of physical space allocated to employees in London buildings would be against the law in Continental Europe.

"We are very efficient," he said. "We do pack them in like sardines. It started with bomb damaged buildings in the war, which meant that workers had to share smaller and smaller amounts of space.

"It took many years to rebuild London by which time we had got used to that amount of space, and companies were not prepared to give it up."

Employers in Britain also pack workers much deeper into buildings than elsewhere. In Germany for instance, workers have to be a certain distance from a window.

In Britain, there are no stipulations about how much room an employee is given in an office or how close that worker needs to be to a source of natural light.