(June 27, 2018, Hong Kong) – Hong Kong Central remained the most expensive office market in the world, according to CBRE’s annual Global Prime Office Occupancy Costs report.
Hong Kong Central’s overall prime occupancy costs of US$307 per sq. ft. per year topped the “most expensive” list, followed by London West End (US$235 per sq. ft.), Beijing Finance Street (US$201 per sq. ft.), Hong Kong Kowloon (US$190 per sq. ft.) and Beijing Central Business District (US$189 per sq. ft.).
Central’s overall prime occupancy costs have been rising for three consecutive years. The costs in 2017 and 2016 average US$303 and US$290 per sq. ft per year respectively.
“Central takes the crown as the most expensive office location in the world, a position that it has held for the past two years. Vacancy in Central has dropped to 1.1%, the lowest since Q3 2015. As a result, decentralization has also remained a trend for professional firms seeking office space,” said Alan Lok, Executive Director, Advisory & Transaction Services – Office, CBRE Hong Kong, “Banking and finance continue to be the key drivers of demand, particularly from mainland Chinese firms.”
Global prime office occupancy costs – which reflect rent, plus local taxes and service charges for the highest-quality, “prime” office properties – rose 2.4 percent year-over-year, with the Americas up 3.2 percent, EMEA up 2 percent and Asia Pacific up 1.7 percent.
Asia Pacific was home to six of the top 10 most expensive markets – Hong Kong (Central), Beijing (Finance Street), Hong Kong (Kowloon), Beijing (CBD), Tokyo (Marunouchi/Otemachi) and New Delhi (Connaught Place – CBD). This year, New York (Midtown Manhattan) fell from 3rd to 6th place and Shanghai (Pudong) dropped slightly from 10th to 11th place.
In Asia Pacific, Bangkok had the highest growth, followed by Hong Kong Kowloon, Singapore, Melbourne and Wellington.
Across the globe, Dubai, Shanghai Puxi, Midtown Manhattan, Moscow and Abu Dhabi saw the largest decreases year-over-year.
Top 10 Most Expensive Markets
(In US$ per sq. ft. per annum; as of Q1 2018)
Rank Market Occupancy Cost
1 Hong Kong (Central), China 306.57
2 London (West End), United Kingdom 235.01
3 Beijing (Finance Street), China 200.91
4 Hong Kong (Kowloon), China 189.56
5 Beijing (CBD), China 189.44
6 New York (Midtown Manhattan), U.S. 183.78
7 New York (Midtown-South Manhattan), U.S. 171.56
8 Tokyo (Marunouchi/Otemachi), Japan 171.49
9 New Delhi (Connaught Place – CBD), India 153.26
10 London (City), United Kingdom 144.95
Largest Annual Changes Occupancy Costs
(In local currency and measure; as of Q1 2018)
Top 5 Increases
Rank Market % Change
1 Durban, South Africa 21.4
2 Bangkok, Thailand 16.9
3 Marseille, France 16.7
4 Vancouver (Downtown), Canada 16.1
5 Oslo, Norway 15.1
Top 5 Decreases
Rank Market % Change
1 Dubai, United Arab Emirates -15.4
2 Shanghai (Puxi), China -12.8
3 New York (Midtown Manhattan), U.S. -9.4
4 Moscow, Russian Federation -7.5
5 Abu Dhabi, United Arab Emirates -7.3