Hong Kong's central business district has topped the global commercial real estate market as the world's most expensive office market, according to CBRE Global Research and Consulting's semi-annual Prime Office Occupancy Costs survey.
Hong Kong central led the ‘most expensive’ list with overall occupancy costs of $246.30 per square feet per year. This topped London's West End, which had total occupancy costs of $219.81. Tokyo's Marunouchi Otemachi district was the third most expensive market for office space, followed by the central business districts in Beijing and New Delhi. Other Asia-Pacific markets in the top ten include Beijing-Finance Street in sixth place and Hong Kong-West Kowloon in seventh. Rounding out the top 10 were Moscow, London's central business district and Sao Paulo, Brazil.
Among the U.S. markets, the midtown section of New York Midtown market was ranked 16th globally. Downtown San Francisco experienced the largest year-over-year increase, at 36.4%, of the 133 markets tracked with an occupancy cost of $90 per square foot. San Francisco's Peninsula market was not far behind, rising 28.6% to reach $62.10 per square foot.
‘The global office market recovery cooled over the past year, hampered by the ongoing European debt crisis, a deceleration of growth in emerging markets and ubiquitous uncertainty created by the 'fiscal cliff' in the U.S.,’ says Raymond Torto, CBRE's global chief economist. ‘However, tight market conditions, strong demand for high quality space and low levels of new construction continue to drive up occupancy costs in many prime office markets across the globe.’
Photo: University of Hong Kong