According to global real estate advisor Knight Frank, office skyscrapers in Hong Kong are the most expensive commercial real estate assets in the world in 2017.
According to Knight Frank's analysis, which uses rental values as at Q4 2016 and prime yields as a basis, pricing for skyscrapers in Hong Kong has reached $8,000 per sq. ft, over 60 per cent higher than tall buildings in Tokyo, where pricing is estimated at $4,900 per sq. ft.
Hong Kong developer Henderson Land recently paid $3bn for an old five-story car park, indicating the frenzied state of Hong Kong's property market. The price was a record lump sum for Hong Kong and a record also per square foot. The sale sets the world's most expensive city even further apart from its rivals.
The top five of Knight Frank's Skyscraper Capital Values Index is completed by Manhattan, where tall buildings have an estimated value of $3,700 per sq. ft, San Francisco ($2,500) and the City of London ($2,450).
Andrew Sim, Head of Global Capital Markets, Knight Frank, commented, "For the first time we have comparatively analyzed the capital value of the world's skyscrapers, which are seen by many as a bellwether for the commercial property market as a whole.
"Pricing is highest in Hong Kong which reflects the world's highest skyscraper rents, and the lack of available land for future development. Similarly, pricing in major financial centres such as Shanghai, Singapore, Manhattan and London is supported by the high level of demand for space in these buildings from financial services businesses, in particular.
"However, pricing for tall buildings in Sydney, Melbourne and Taipei is likely to move more rapidly in the next two years, and we expect to see investors in search of trophy assets looking beyond the major financial centres."
Knight Frank has analyzed Skyscraper Capital Values for the first time as part of its inaugural Active Capital Report.