What Are The Priciest Offices In The World?
Rental rates of office space across the globe have increased significantly but some office markets are pricier than others. The rankings are out and Hong Kong has emerged as the most expensive market in the world.
In Hong Kong, the occupancy costs, including the service charges, local taxes, and rent, are higher in the Central district. These prices are 30% higher as compared to the London’s West End. London’s West End is the 2nd spot that is considered to be the most expensive. The revelations were revealed by the CBRE Group, which conducted a survey on prime office real estate.
Hong Kong has topped the list, especially its Central district, as having the highest rent for the 3rd time in a row. It has clearly outweighed and surpassed the others in the survey. Despite the high prices, Hong Kong’s market is still attracting major investors from across the globe including Mainland Chinese and other domestic investors.
Property deals have been going on for a long time and in the last week, Swire Properties itself sold a stake in two of the office towers in Hong Kong to a local businessman for a whopping sum of S$2.6 billion.
On the other hand, Manhattan seems to have high rates but it surprisingly is not amongst the top 5 in the most expensive offices in the world. It was also the 3rd most expensive market in the world in the report that was revealed last year but 9th in 2016.
During this year, Midtown was the 3rd amongst the top decliners, after Shanghai and Dubai. On the other hand, businesses are leasing some of the most central space south in Midtown and they are paying over $172 per square foot, which is a 10% rise from a year before. Midtown South also has important landmarks such as Empire State Building.
In the international realm, the cost of prime office space increased by 2.4% during the 1st quarter from a year before and this was because of the high economic growth. Moreover, the demand for technology and finance played an important role as far as the top gainers were concerned including Oslo, France, Bangkok, and others.
The occupancy costs across America also rose by 3.2%, with downtown Vancouver in the lead. The markets of Middle East, Europe, and Africa were just behind, with 2% and the Asia Pacific reported a 1.7% growth.
For the first time in the existing economic cycle, the growth in all of the three regions is reported to be higher than the usual trends, said Richard Barkham, the CBRE Global Chief Economist.
While commenting, Barkham said, “The occupancy cost growth in America has kind of slowed down as compared to a year before and it is the region with the highest increase in costs”. While commenting further, he said, “We also expect the global office occupancy costs to rise by about 2% in the coming year”.
Hong Kong, therefore, remains on the top as far as the priciest offices in the world are concerned.