LONDON’S west end has unseated Hong Kong Central as the world’s most expensive office market, regaining the top spot it lost three years ago.
The cost of renting an office in the west end has shot up by 14.3 per cent in the past year to $259.36 per square feet, driven by a squeeze in supply of new space, research by CBRE out yesterday showed.
The property advisory firm said a renewed appetite from financial firms such as hedge funds willing to pay a premium for space in the most prestigious areas also helped push prices upwards.
Meanwhile the City held onto its place as the ninth most costly office market at $142.71 per sq ft.
However Asia continued to dominate as the world’s most expensive office market. It occupied six of the top ten slots with Hong Kong Central in second place with rental space costing $234.30 per square foot. Beijing’s Finance Street, Beijing’s Central Business District and Hong Kong’s West Kowloon made up the final top five of the world’s most expensive markets.
Overall occupancy around the world rose 2.2 per cent during the year, as the global economy continued to recover.
“The growth of occupancy costs for prime office space in the past year underscores that even in a slowly recovering economy, demand for the best space in the best locations continues to be strong,” said Dr Raymond Torto, global chairman of CBRE Research
The study also found that rents were rising at the fastest pace in the Americas driven by strong demand.
Boston (Downtown) saw a 15.4 per cent annual increase in occupancy costs, largely due to high demand from technology firms. CBRE said this high demand, combined with low vacancy rates, had given landlords leeway to up rents.