London’s West End is still the world’s most expensive office market, according to Richard Ellis’s global office rents survey. Hong Kong’s central business district has risen to second place from third, dislodging Tokyo’s inner central, which is now the third most expensive office market.
Mumbai and Moscow’s markets finished fourth and fifth, respectively, in the CBRE rankings, which follows office occupancy costs in 176 cities around the world.
The report found that year-on-year, global occupancy costs have fallen in markets surveyed, with a collective drop of -4.6 percent during the 12 months to 31 March, 2010. Of 176 cities, 133 experienced a decline and 33 markets registered double-digit percentage-point drops. The 53 office markets that experienced annual increases in occupancy costs were primarily smaller markets impacted by “quality shifts” in key assets.
CBRE Global chief economist Dr. Raymond Torto said that although economic data shows signs of improvement year-on-year, the commercial real estate market lags the economy. Quarterly data, he said, is beginning to show a bottoming out of real estate markets, with London currently experiencing an “uptick” in rents. The Latin American market, namely Brazil, was the only region to experience an increase in occupancy costs year-on-year.
The costs for office space are measured in US dollars, with Torto adding in the statement that “currency fluctuations play a big role with regard to where markets rank in the top ten for office costs”.
The 10 most expensive office markets are:
1. London West End
2. Hong Kong central business district
3. Tokyo inner central, Japan
4. Mumbai, India
5. Moscow, Russia
6. Tokyo outer central, Japan
7. Paris lle-de-France, France
8. London City
9. Dubai, United Arab Emirates
10. Sao Paulo, Brazil