According to CBRE Research's biannual Global Prime Office Occupancy Costs survey, Asia continued to dominate the world's most expensive office locations, accounting for seven of the top ten markets. London's West End district remained the world's highest-priced office market.
London West End's overall prime occupancy costs of US$274 per sq. ft. per year topped the list of most expensive office markets, followed by Hong Kong's Central district with total prime occupancy costs of US$251 per sq. ft. Beijing (Finance Street) came in third at US$198 per sq. ft., Beijing (Central Business District (CBD)) at US$189 per sq. ft., and Moscow (US$165 per sq. ft.) rounded out the top five. New Delhi (Connaught Place CBD), Hong Kong (West Kowloon), Tokyo (Marunouchi Otemachi), and Shanghai (Pudong) also features in the top ten ranking.
The change in prime office occupancy costs mirrored the gradual, multi-speed recovery of the global economy. Global prime office occupancy costs rose 2.5% year-over-year, led by the Americas (up 4.1%) and Asia Pacific (up 2.8%).
"We expect the gradual recovery of the global economy to continue, leading to better hiring rates and further reduction in the availability of space across most markets over the near term," said Richard Barkham, Global Chief Economist, CBRE. "In this environment, we expect occupancy costs to continue rising from current levels, further limiting options for occupiers. Technology, quality and flexibility are expected to increasingly come into consideration in space use and location decisions, as occupiers will seek to contain costs and improve productivity."
CBRE tracks occupancy costs for prime office space in 126 markets around the globe. Of the top 50 most expensive markets, 20 were in Asia Pacific, 20 were in EMEA, and 10 were in the Americas.
Asia Pacific had 20 markets ranked in the top 50 most expensive, including the seven in the top ten. Occupier activity in this region was largely driven by domestic corporations and companies in the technology, media and telecommunications sectors. Half the markets saw costs increase above 1%.
The Central district in Hong Kong remained the only market in the world--other than London's West End--with a prime occupancy cost exceeding US$200 per sq. ft.
The most expensive market in the global ranking from the Pacific Region was Sydney at US$99 per sq. ft., in 19th place.