LONDON’S West End has leapfrogged Hong Kong to regain its spot as the world’s most expensive location to rent office space after rents declined in the Asian city.
Property specialists DTZ’s annual Global Occupancy Costs survey published today shows that occupiers in London’s West End had to pay US$23,500 (£14,900) per workstation per annum at the end of 2012, which is more than three times the global average.
“These figures are a tangible reflection of the fact that London is a highly attractive place to locate a business,” Richard Howard, head of DTZ West End, said, although he warned that prices in the West End can still vary greatly.
“While boutique specialist financial sector companies are happy to pay a premium to be based in one of the world’s premier business districts, recent transactions involving Google, Expedia, Skype, Facebook and LinkedIn have all been at a considerable discount to Mayfair prices, reflecting the vibrancy of their distinctive locations,” he added,
Facebook moved into larger 30,000 sq ft offices in Covent Garden last year although the exact amount it paid is not known.
In 2011, London’s West End lost its top spot as the world’s least affordable district when Hong Kong jumped from fourth to first place.
Karine Woodford, head of occupier research at DTZ said Hong Kong has once again been overtaken by London after occupancy costs fell 12 per cent.
Overall in 2012, average global occupancy costs increased by one per cent to US$7,495 per workstation in 2012.
In London’s Square Mile, the cost for companies to provide office space for their workers increased 3.7 per cent while in the UK overall, costs increased by 1.6 per cent.
DTZ said City occupiers showed “subdued demand” and remained reluctant to move “unless compelled by factors outside of their control.”