Hong Kong topped the global commercial real estate market as the world's most expensive office market, while the Asia-Pacific region accounted for six of the top 10 most expensive markets worldwide, according to CBRE Global Research and Consulting's semi-annual Prime Office Occupancy Costs survey. The Asia-Pacific region also accounted for the market with the strongest growth in occupancy costs.
Hong Kong's central business district (CBD) led the list with overall occupancy costs of $248.83 per square foot. This topped London's West End, which, despite a 4.7% year-over-year increase, had total occupancy costs of $220.15 per square foot. Tokyo was the third most expensive market for office space, followed by Beijing's Jianguomen CBD; Moscow; Beijing's Finance Street district; the West Kowloon section of Hong Kong; Sao Paulo, Brazil; India's New Delhi-Connaught Place CBD; and central London.
Of the top 50 most expensive markets on the CBRE list, 19 are in Asia-Pacific, 19 are in the European-Middle-East-Africa region and 12 are in the Americas. In the U.S., the Midtown section of New York City – ranked 18th globally – led the country with an office occupancy cost of $114.30 per square foot, on the heels of a 5.9% year-over-year increase, while downtown San Francisco – ranked 37th globally – led the U.S. with the largest year-over-year increase, at 34%.
‘The most expensive office locales are increasingly located in dynamic markets across the emerging economies as office occupiers diversify their global footprints in these markets to take advantage of rising incomes and the availability of labor,’ says Dr. Raymond Torto, CBRE's global chief economist. ‘The most expensive office occupier markets also have a diversified economic base; limited, available, institutional-quality space; strong currencies; and are increasingly located in urban centers.’