Hong Kong’s Central Retains Position As World’s Priciest Premium Office Market
HONG KONG – Even though office vacancy in the Chinese territory hit a record-high in October 2022, the city’s commercial hub Central remains as the most expensive premium office market in the world, according to a new report published by Jones Lang LaSalle (JLL) on Thursday evening (8 December, SGT).
In the real estate consultancy’s latest Premium Office Rent Tracker (PORT) 2022, Hong Kong’s Central was named as the world’s priciest upscale office market, with overall occupancy cost at US$259 psf per annum based on net lettable area (NLA).
Completing the top 5 are New York’s Midtown (US$220 psf), West End in London (US$182 psf), Beijing’s Finance Street (US$167 psf) and California’s Silicon Valley at US$149 psf. Meanwhile, Singapore only made it to the 11th spot with a total occupancy cost US$109 psf.
“The flight to quality seen across office markets globally is further evidenced in our latest Premium Rent Office Tracker. Premium office rents grew by 4.8 percent over the year, highlighting ongoing demand for top-quality products at a time when many companies are reassessing their office needs,” stated JLL.
“Upward pressure on rents for premium space is likely to continue” after the property consultancy’s Future of Work Survey in July 2022 showed that 77 percent of corporate real estate professionals agree that investing in quality office space is more crucial than increasing work space.
Moreover, the real estate consultancy shared that green building certifications are now a de facto requirement to be considered as premium office space, with 87 percent of the office buildings covered in the Premium Office Rent Tracker having a sustainability certification, like LEED, NABERS, and BREEAM. This is up from 84 percent in 2021. For workspaces in high-end markets, the percentage of sustainability certified buildings increases to 95 percent.
Similarly, 21 percent of the structures surveyed globally this year have a health and wellness-related certification such as WELL or Fitwel compared to just 13 percent last year.
Furthermore, JLL’s latest Premium Office Rent Tracker revealed that financial firms dominate the demand for upscale office space, making up 72 percent of the demand this year compared to 43 percent in 2021.
“Meanwhile, technology firms have continued to play a key role in driving premium office occupancy costs, especially in the more affordable cities, along with professional and business services firms,” added the property consultancy.