London falls to third in world for office costs

Marion Dakers
LONDON is now the third most expensive city in the world to rent space for a business, having been knocked out of second place by New York in the first six months of the year, a report out today shows.

Hong Kong has kept its title as the world’s dearest property rental market, though prices have fallen one per cent in the period, estate agent Savills said.

New York’s office and staff housing costs in the more desirable neighbourhoods rose 1.5 per cent in the first six months of 2013, leapfrogging London, where prices were up 0.5 per cent, Savills added.

Since crashing in 2009, London prices have rebounded 17 per cent, compared to 36 per cent in New York.

Savills picked out Singapore as the city with the best value for money, based on accommodation costs compared to GDP per head.

“Headline per square foot office rents are a misleading indication of the total real estate costs faced by relocating companies,” said Yolande Barnes, director of Savills world research. “The value of real estate is higher where more corporate revenue can be generated.”