LOS ANGELES, May 05, 2010 (BUSINESS WIRE) -- London's West End remains the world's most expensive office market, according to CB Richard Ellis Group, Inc. (CBRE) Global Research and Consulting's semi-annual Global Office Rents survey. Hong Kong's Central Business District (CBD) has risen to second place pushing Tokyo's Inner Central to third place. Mumbai is now in fourth position on the list while Moscow remains in fifth in the CBRE rankings, which tracks occupancy costs for prime office space in 176 cities around the globe.
Office occupancy costs measured in U.S. dollars are affected by changes in the dollar's value versus the respective local currency. Hence, office occupancy costs when converted into U.S. dollars are driven by both the local market dynamics of supply and demand, as well as currency changes.
"We have found that currency fluctuations play a big role with regard to where markets rank in the top 10 for office costs," said Dr. Raymond Torto, CBRE's Global Chief Economist. "However, the 'most expensive club' still includes the usual names -- London, Hong Kong and Tokyo."
The report also found that on a year-over-year basis, global occupancy costs are searching for a bottom, with the markets monitored revealing a collective drop of -4.6% worldwide over the 12-month period ending March 31, 2010. Larger markets experienced a slightly greater decline of -6.4%. The majority of markets (133) experienced a decline, with 33 of these markets registering double-digit percentage-point drops in office occupancy costs. 53 markets experienced annual increases in occupancy costs, generally smaller markets affected by quality shifts in key market assets...
... North America is led by Midtown New York, which posted an office occupancy cost of US$64.51 per sq. ft. While office occupancy costs in Midtown New York are high for North America, that market ranked just 26th globally.
North America saw a below-average decline of -3.3% (year-over-year), making the region the third weakest with falling occupancy costs in 51 out of 77 markets. The largest declines were in Calgary CBD (-24.9) and New York Downtown (-19%).
Top Ten Most Expensive Markets
(In US$ per SF per annum) US$/SF/annum
1.) London West End, United Kingdom 182.94
2.) Hong Kong (Central CBD) 153.20
3.) Tokyo, (Inner Central), Japan 143.99
4.) Mumbai, India 125.76
5.) Moscow, Russian Federation 125.10
6.) Tokyo (Outer Central), Japan 118.41
7.) Paris Ile-de-France, France 113.23
8.) London City, United Kingdom 110.07
9.) Dubai, United Arab Emirates 108.92
10.) Sao Paulo, Brazil 100.00
Bloggers note: It is interesting to see that the major US office space leasing markets are no where close to the top ten in office space rent costs. Midtown Manhattan is only just over 1/3 of the cost of number one London office space rental rates. The other interesting location in the top ten is Mumbai, India, still nearly double the cost of Midtown Manhattan.
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