Hong Kong and London remained the two most expensive office locations in the world. Hong Kong Centralʼs overall prime occupancy costs came to USD 3,256 per sqm per year, followed by London’s West End (USD 2,302 per sqm), New York Midtown (USD 2,183 per sqm), Hong Kong West Kowloon (USD 2,045 per sqm) and Beijingʼs CBD (USD 1,971 per sqm).
“The global top-ten list reflects the ongoing strength of global gateway cities in attracting and maintaining a successful occupier base,” said Richard Barkham, global chief economist, CBRE. Global prime office occupancy costs – which reflect rent, plus local taxes and service charges for the highest-quality “prime” office properties – rose 1.9 % year-over-year, with the Americas up 3.6%, EMEA up 0.8% and Asia Pacific up 1.2%.
Durban (South Africa) had the highest increase in occupancy cost overall, though Stockholm (Sweden) registered some of the fastest growth in Europe, along with Palma de Mallorca (Spain), Belfast (United Kingdom) and Amsterdam (Netherlands)also showed double-digit growth, with Lyon (France) and Berlin (Germany) not far behind. .
In Asia Pacific, Shanghai (Puxi) in China had the highest growth in occupancy cost, followed by Guangzhou, Bangalore and Shanghai (Pudong). Buenos Aires showed the biggest increase in the Americas overall, while suburban Denver, suburban Houston and New York Midtown South saw the largest occupancy-cost increases in the United States.
CBRE tracks occupancy costs for prime office space in 121 markets around the globe. Of the top 50 “most expensive” markets, 21 were in Asia Pacific, 16 were in EMEA and 13 were in the Americas.
In London’s West End, the fall in occupancy costs is largely due to a fall in rents triggered by more subdued demand, particularly amongst financial occupiers who have become less willing to pay the high rents prevailing in London’s premier market. London (City) was pushed out of the top-ten most expensive markets to 11th place, despite prime office costs rising by 2.9%.
Occupier efforts to reduce occupancy costs due to the ongoing strength of the Swiss franc relative to the euro have also resulted in falls in Swiss markets, including Geneva and Zurich.
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