London’s West End is once again the most expensive office location in the world, according to a research document by property services firm DTZ.
The firm ranked London as the fifth most expensive office location in its survey last year, however a “short, sharp rental correction” ensured the city leapfrogged Paris, Dubai and Hong Kong. These cities were ranked second, third and fourth respectively but have now fallen to sixth and eleventh. Hong Kong remained in the top five most expensive cities in fourth.
New entrants to the top ten most expensive cities include Zurich, Boston and Frankfurt, which were ranked eight, ninth and tenth respectively. DTZ said their positions were because of more moderate rental declines comparative to other locations.
The report singled out Singapore as a feeling the impact of the global economic crisis particularly badly. It said the city had experienced weaker occupier demand with “substantial” new supply of space. This has led to rents being dragged downwards. Kiev was another market it said had suffered.
Karine Woodford, head of real estate strategy at DTZ, said those markets which had been forced to reduce occupancy costs may benefit as financial more attractive options for businesses still counting the affects of the global economic downturn.
She said: “With falling rents and more supply to choose from, the office market will offer tenants real value for money in the current climate, and we may see multi-national companies taking advantage of this shift and relocating their operations accordingly.”
The report, which measures 116 business districts across 47 countries and territories, assesses the main components of occupancy costs, ranking each city in terms of annual costs per workstation.