London unseats Hong Kong as the world's most expensive office market
London's West End has seen a 14 per cent jump in costs this year to $259
Wednesday 18 December 2013
London’s West End has stolen Hong Kong's crown as the world’s most expensive office market after a 14 per cent rise in costs this year, a leading property agent said today.
Consultant’s CBRE’s league table of total occupancy costs puts the West End - suffering an acute shortage of space as well as recovering demand from financial players in the traditional homes of the hedge funds - at $259.36 (£159.20) per square foot.
This is ahead of the Asian powerhouses which dominate the rest of the world’s top five - Hong Kong’s central district, Beijing’s Finance Street and central district and Hong Kong’s West Kowloon.
CBRE’s occupancy cost measure also includes business rates, which are high in London, and service charges, which inflate the total occupancy bill. But there have been 14 deals struck in the West End above the £100 a square foot mark so far this year.
The biggest of these was Singaporean sovereign wealth fund Temasek, which planted its flag in London in dramatic style this year for a new European headquarters in St James’s. The reported rent of £130 a square foot was the highest in the West End since before the credit crunch struck in 2007.
Emma Crawford, CBRE’s head of West End & Midtown leasing, said: “The headline rents in the West End office market relate to the sub 10,000 sq ft transactions in the core market of Mayfair and St. James’s. The financial occupiers which traditionally pay these rents are becoming increasingly active as the market recovers.”
CBRE’s global head of research Raymond Torto said: ““The growth of occupancy costs for prime office space in the past year underscores that even in a slowly recovering economy, demand for the best space in the best locations continues to be strong.”
Top Ten Most Expensive Office Market
(in $ per sq. ft. per year)
London - Central (West End), United Kingdom
Hong Kong (Central), Hong Kong
Beijing (Finance Street), China
Beijing (CBD), China
Hong Kong (West Kowloon), Hong Kong
Moscow, Russian Federation
New Delhi (Connaught Place - CBD), India
Tokyo (Marunouchi Otemachi), Japan
London - Central (City), United Kingdom
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