Asia continued to dominate the world’s most expensive office locations, accounting for four of the top five markets, according to CBRE Research’s semi-annual Global Prime Office Occupancy Costs survey.
London’s West End’s overall prime occupancy costs topped the ‘most expensive’ list at US$267 per sq ft per year. Hong Kong (Central) followed in second at US$254 per sq ft per year, and was the only market in the world other than London’s West End with a prime occupancy cost exceeding US$200 per sq ft.
Beijing (Finance Street) (US$196 per sq ft), Beijing (Central Business District (CBD)) (US$188 per sq ft) and New Delhi (Connaught Place – CBD) (US$157 per sq ft) rounded off the top five.
Bangkok was ranked in 105th place out of the 127 cities worldwide surveyed by CBRE Research in Q1 2015 for overall occupancy costs. Canberra in Australia was the only city in the Asia-Pacific that was cheaper than Bangkok in 111th position.
The change in prime office occupancy costs mirrored the gradual recovery of the global economy.
Overall global prime office occupancy costs rose 2 percent year-on-year, with Asia-Pacific up 1.4 percent, reflecting the economic pressures that prevailed in the region over the past year.
Richard Barkham, Global Chief Economist, CBRE, said: “Occupier caution has declined and corporate confidence has been on the rise, and this confidence is starting to translate into a degree of expansionary momentum.
“At the same time, many office markets are increasingly short of the quality, modern, flexible and highly accessible or CBD-located office buildings which corporations are seeking to execute workplace strategies that will drive productivity and attract or retain talent.”
Henry Chin, Head of Research, CBRE Asia-Pacific, added: “On the Asia-Pacific region, occupancy cost trends were mixed, with regional surveys showing stronger hiring intentions among employers in India, Taiwan, New Zealand, the Philippines and Japan while corporate hiring activity remained muted in other locations. India and the Philippines also continued to benefit from growing IT back office services looking for operational and costs efficiency.
“Throughout Asia, technology firms, business process outsourcing (BPO) firms and non-banking financial institutions are in expansionary mode, stimulating demand for office space. However, we are also seeing diverse occupier activity in the region with less expansionary markets—some occupiers are looking to optimize existing accommodations rather than expand.”
CBRE tracks occupancy costs for prime office space in 127 markets around the globe. Of the top 50 ‘most expensive’ markets, Asia-Pacific had the most number of markets featured, with 20 markets ranked.
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
