Despite a 5.3 percent year-on-year price rise Bangkok is the cheapest office location in Asia-Pacific for prime office rents.
According to a new report from CBRE, the dominance of Asia in the world’s most expensive office locations continued, with Hong Kong-Central retaining its place the highest priced market.
Bangkok is now the cheapest office location in Asia Pacific despite the increase in average rents of 5.3 percent year-on-year for prime grade A CBD office buildings, according to CBRE’s Global Research and Consulting’s semi-annual Prime Office Occupancy Costs survey.
Out of the 127 cities surveyed, Bangkok was ranked at 115th (THB842), 12 positions below Manila and 69 positions below Jakarta, becoming the cheapest in Asia Pacific.
Nithipat Tongpun, Executive Director – Head of Office Services at CBRE Thailand, said: “Bangkok office rents increased for both grade A and grade B offices in both the central business districts and and non-central business district areas.
“The total amount of completed office space is 8.1million square metres and the total take up in Q1 2013 was 35,000 sqm. Around 500,000 sqm of space is expected to be completed in all areas over the next three years.
“Almost half of this space will be owner occupied and there will be only two new grade A buildings in Bangkok’s central business district.”
Nithipat added that rents for prime buildings in Bangkok are going to continue to rise.
Hong Kong Central’s overall occupancy costs of THB6,539 per sqm/per month topped the most expensive” list for the third consecutive time. London’s West End followed with total occupancy costs of THB6,187. Beijing’s Finance Street (THB5,422), Beijing’s Jianguomen central business district (THB5,200) and New Delhi’s Connaught Place central business district (THB4,974) completed the top five.
Other Asia Pacific markets in the top ten include Hong Kong’s West Kowloon (6th) and Tokyo’s (Marunouchi/Otemachi) (8th). New York’s Midtown Manhattan (10th) returned to the top ten markets for the first time since early 2012, joined by Moscow (7th) and London’s City (9th).
Globally, occupancy costs rose by 1.4 percent on a year-over-year basis as modest growth in the Americas and Asia Pacific was partly offset by a slight decrease in recessionary Europe. However, the modest global average uptick masked significant increases in markets like Jakarta, Indonesia and suburban Houston, Texas, which posted increases of 38.9 percent and 21.2 percent respectively.
“While the pace of occupancy cost growth globally has slowed, limited supply of prime space in key core business centres has fuelled continuous upward movement of occupancy costs,” said Dr. Raymond Torto, CBRE’s Global Chief Economist.
“The most expensive office markets often attract the regional headquarters of large multinational firms that require a prime location in a prestigious building with access to major global and regional transit routes.”
CBRE tracks occupancy costs for prime office space in 127 markets around the globe. Of the top 50 “most expensive” markets, 21 are in Asia-Pacific, 18 are in EMEA and 11 in the Americas.
While comparisons in dollars are affected by currency exchange rates, annual percent change calculations are based upon occupancy costs in local currency and are not influenced by currency changes.
Andrew Batt, International Group Editor of PropertyGuru, wrote this story. To contact him about this or other stories email andrew@allproperty.com.sg
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