West End rent is the highest in the world

LONDON&rsquo;S West End has regained its title as the most expensive place in the world to rent an office, overtaking Tokyo in the past six months as the recovery in demand for space begins to take hold.<br /><br />Despite recording an annual tumble in rents of nearly 18 per cent, banking and finance companies are increasing their demand for offices in the West End, according to research published yesterday.<br /><br />The survey of global office rents from property consultants CB Richard Ellis (CBRE) showed average West End rents at $185 (&pound;111) per square foot, compared with $172 (&pound;103) per square foot in Tokyo&rsquo;s Inner Central District. The City came ninth on the list, with an office costing $108 (&pound;65) per square foot.<br /><br />CBRE&rsquo;s Central London executive director Stewart Smith said: &ldquo;At the peak of the market in 2008, West End rents were around &pound;120 per square foot and they are now down to around &pound;80. However deals are being done at higher levels for premium addresses. At the end of the summer we saw a sharp rise in activity in the West End. Demand remains concentrated, with banking, finance and business services accounting for two-thirds of activity.&rdquo;<br /><br />Several of the world&rsquo;s financial hubs topped the list of the year&rsquo;s biggest rental fallers. These included Singapore, which saw rents fall 53 per cent, and Midtown New York, where rents plunged by almost 30 per cent, taking the district to 24th in the rankings. Abu Dhabi office rents have tumbled nearly 39 per cent to $84 (&pound;50) per square foot. Aberdeen, however, and Rio de Janeiro both grew by more than 12 per cent.<br /><br />On a global level, the report said office costs posted a drop of eight per cent worldwide over the year.<br /><br />CBRE said the market for office rentals was on the verge of recovery.