Rents in prime office buildings in London’s West End have fallen to such an extent, Hong Kong and Tokyo have now overtaken the capital as the most expensive cities in which to do business.
According to a report from Cushman & Wakefield, rents in the West End fell 23 percent in 2008. Combined with currency fluctuations, this means for the first time in nine years, London offices are no longer the most expensive in the world.
Although rents in Hong Kong actually fell 4 percent during 2008, the city’s €1,743 ($2,213) per square metre per annum cost of space in 2008 was well above London’s €1,403 per square metre. Tokyo came in at €1,649 per square metre per year, a fall of 19 percent in 2008.
James Young, head of Central London offices at Cushman & Wakefield, said 2008 wasn’t a “great” year for London, however falling rental values would make the city more competitive and a key location for businesses going forward.
The Cushman Office Space Across the World 2009 report compares 202 cities in 57 countries globally. As well as Hong Kong, Tokyo and London, other cities to make it into the top 10 most expensive office locations in the world list include: Moscow; Dublin; Mumbai; Paris; Damascus, Syria; Singapore and New York Midtown.
Globally office rents rose 3 percent in 2008 – down from the 14 percent gain in 2007. Of the 202 cities studied, more than half reported rent growth, a quarter stayed flat and 16 percent reported rent reductions.