London Boasts World's Most Expensive Office Area
The world's most expensive office space neighbrohood is St. James, London, home to several of the world's richest hedge funds and sovereign wealth funds.
With the average cost of $194 per square meter per year, St. James, tops a list of the world's top 12 most expensive locations in the world, beating areas in Hong Kong and Beijing, according to a report from Jones Lang LaSalle.
The locations topping the list are benefitting from a scarcity of available space and strong demand from the growth in niche financial and technology sectors driving office prices higher across the globe, JLL reports.
The firm expects the same mix of locations to top the list in the short term, sector-specific markets like Silicon Valley in California are climbing the rankings. Tech-driven Menlo Park in Silicon Valley currently ranks fifth on the list.
"With premium rents in the central business districts of a number of U.S. cities now increasing, we can expect to see additional U.S. markets ranking among the most expensive over the next 24 months," JLL director of research Jeremy Kelly said in the report.
As some markets climb the list, changes in global market dynamics can adversely affect other office areas, JLL said.
"Tokyo was the most expensive market for office space in the world for many years," Kelly said, "but it was hit hard by the global financial crisis and has been surpassed by other Asian power cities."
A report from CBRE this summer showed central Hong Kong was the most expensive office market
in the world. It ranks second in the JLL report, which focused more on specific neighborhoods.
Top 12 Most expensive office areas: 1. St James's, LONDON: GBP 125 per sq. ft. per year (USD $194 per sq. ft. per year)
With a wealth of high-end financial institutions, St James's personifies the West End's unparalleled accessibility, luxury amenities and proximity to clients. 2. Central, HONG KONG: HKD 105 per sq. ft. per month (USD $162 per sq. ft. per year)
Complemented by first class hotels, luxury retail, excellent transport links and interconnecting walkways, Central is the location of choice for the city's banking and finance community. 3. Finance Street, BEIJING: RMB 750 per square meter per month (USD $137 per sq. ft. per year)
A Beijing submarket planned specifically for highest-tier financial institutions and major state-owned enterprises, Finance Street also attracts global investment banks and insurance companies.
4. Rue du Rhône, GENEVA: CHF 1,150 per square meter per year (USD $116 per sq. ft. per year)
Rue du Rhône is Geneva's prime location for private wealth management, banking and luxury retail brands.
5. Menlo Park, SILICON VALLEY, CALIFORNIA (USD $111 per sq. ft. per year)
The epicenter of the technology universe, Sand Hill Road in Menlo Park is home to many venture capitalists. 6. Kremlin Area, MOSCOW: USD 1,150 per square meter per year (USD $107 per sq. ft. per year)
Office space in Moscow's Kremlin area is popular with Russian and international finance and legal tenants. New construction is tightly restricted, and that has helped further boost the value of office space in the area.
7. Fifth Avenue, MIDTOWN MANHATTAN, NEW YORK: USD $104 per sq. ft. per year
Consistently ranked among the most expensive shopping streets in the world, Fifth Avenue is also home to numerous hedge funds looking for top-quality space in Midtown. 8. Raffles Place/Marina Bay, SINGAPORE: SGD 11 per sq. ft. per month (USD $103 per sq. ft. per year)
The heart of Singapore's financial district is served by a world-class subway system and is a vibrant environment for work, living and play. 9. Golden Triangle, Champs Elysées area, PARIS: EUR 800 per square meter per year (USD $99 per sq. ft. per year)
The center of Paris's tourism and retailing is also an office hub for high-value-add businesses including international law firms and banks, and corporate tenants seeking accessible, high-quality buildings in close proximity to clients.
10. Marunouchi, TOKYO: JPY 28,600 per tsubo per month (USD $98 per sq. ft. per year)
Marunouchi, located on the west side of Tokyo Station, is a long-established office precinct where the lower floors of buildings typically house luxury retail, and higher floors are office space. 11. Uraniastrasse and Paradeplatz area, ZURICH: CHF 900 / per square meter per year (USD $91 per sq. ft. per year)
Uraniastrasse and the area round the Paradeplatz in the core CBD of Zurich feature excellent accessibility and amenities, with office space heavily dominated by the banking sector and private wealth management. 12. Lujiazui, SHANGHAI: RMB16 per square meter per day (USD $87 per sq. ft. per year)
Lujiazui was transformed from empty grassland to a bustling financial district in just 20 years and is now Shanghai's largest CBD, home to 650 Chinese and international financial institutions.