redirect pin user minus plus fax mobile-phone office-phone data envelope globe outlook retail close line-arrow-down solid-triangle-down facebook globe2 google hamburger line-arrow-left solid-triangle-left linkedin wechat play-btn line-arrow-right arrow-right solid-triangle-right search twitter line-arrow-up solid-triangle-up calendar globe-americas globe-apac globe-emea external-link music picture paper pictures play gallery download rss-feed vcard account-loading

Press Release Details

View all news

London (West End) World's Most Expensive Office Market; Hong Kong (CBD) Now Ranks Second

May 05, 2010
Survey Finds Global Rents Down 4.6% from One Year Ago

LOS ANGELES, May 05, 2010 (BUSINESS WIRE) --London's West End remains the world's most expensive office market, according to CB Richard Ellis Group, Inc. (CBRE) Global Research and Consulting's semi-annual Global Office Rents survey. Hong Kong's Central Business District (CBD) has risen to second place pushing Tokyo's Inner Central to third place. Mumbai is now in fourth position on the list while Moscow remains in fifth in the CBRE rankings, which tracks occupancy costs for prime office space in 176 cities around the globe.

Office occupancy costs measured in U.S. dollars are affected by changes in the dollar's value versus the respective local currency. Hence, office occupancy costs when converted into U.S. dollars are driven by both the local market dynamics of supply and demand, as well as currency changes.

"We have found that currency fluctuations play a big role with regard to where markets rank in the top 10 for office costs," said Dr. Raymond Torto, CBRE's Global Chief Economist. "However, the 'most expensive club' still includes the usual names -- London, Hong Kong and Tokyo."

The report also found that on a year-over-year basis, global occupancy costs are searching for a bottom, with the markets monitored revealing a collective drop of -4.6% worldwide over the 12-month period ending March 31, 2010. Larger markets experienced a slightly greater decline of -6.4%. The majority of markets (133) experienced a decline, with 33 of these markets registering double-digit percentage-point drops in office occupancy costs. 53 markets experienced annual increases in occupancy costs, generally smaller markets affected by quality shifts in key market assets.

"While economic data reflects improvements year-over-year, the commercial real estate market lags the economy, and our occupancy cost survey still shows falling costs," added Dr. Torto. "On a quarter-over-quarter basis, rental data in these markets is generally starting to show a bottoming, and in some locations, such as London, even an uptick."

It is also noteworthy that the Latin American Market -- led by Brazil -- was the only region to show an increase year over year in occupancy casts.

Annual percent change calculations are based upon occupancy costs in local currency and measurement and not influenced by currency changes.

Asia-Pacific

Asia-Pacific had 13 markets rank in the top 50 most expensive, with three of the top five most expensive markets. Hong Kong (Central CBD), with an occupancy cost of US$153.20 per sq. ft., was first in the region followed by Tokyo's Inner Central, with an occupancy cost of US$143.99 per sq. ft. Mumbai, with an occupancy cost of US$125.76 per sq. ft., moved up into the top five global markets largely as a result of the recent appreciation of the Rupee to the U.S. dollar.

The most expensive market in the global ranking from the Pacific Region was Perth (US$59.29), which came in at 35th, despite also experiencing the third largest decline in local currency, at -27%.

Asia-Pacific had the largest collective occupancy cost decline with a drop of -9.2%, led by Singapore (-36.2%), Ho Chi Minh City (-30.9%), and Perth (-27.4%). The region had four of the five global markets with the largest decreases and 18 out of 27 markets in Asia-Pacific experienced declines year-over-year. However, the first part of 2010 has seen improved demand for office space with several Asian markets seeing a rebound in rentals, most notable being Hong Kong's Central CBD.

Europe Middle East & Africa

EMEA continues to have the most markets on the top 50 list with 29 markets. London's West End is still the world's most expensive market with an occupancy cost of US$182.94 per sq. ft., despite the recent depreciation of the British pound to the U.S. dollar Other markets in the region that top the list are Moscow (occupancy cost of US$125.10 per sq. ft.), Paris (US$113.23 per sq. ft.), London (City)(US$110.07 per sq. ft.) and Dubai (US$108.92 per sq. ft.).

Overall, the EMEA region had an annual decline of -6.2%, led by Moscow (-26.5%), Dublin (-24.6%) and Abu Dhabi (-23.7%). This region as a whole experienced 44 out of 57 markets with office occupancy costs falling.

Americas

North America is led by Midtown New York, which posted an office occupancy cost of US$64.51 per sq. ft. While office occupancy costs in Midtown New York are high for North America, that market ranked just 26th globally.

North America saw a below-average decline of -3.3% (year-over-year), making the region the third weakest with falling occupancy costs in 51 out of 77 markets. The largest declines were in Calgary CBD (-24.9) and New York Downtown (-19%).

In Latin America, São Paulo moved ahead of Rio de Janeiro in ranking, posting Latin America's highest office occupancy costs at US$100.00 per sq. ft. and is now ranked the 10th most expensive market globally marking the first time that market has been in the top ten. This is a combination of the appreciation of the REAL against the U.S. dollar over the past year, the scarcity of new office product and the strength of the local office market.

Latin America is holding up better than the rest of the world and is the only region posting positive gains, with an average 3.4% increase. Out of the 15 markets in the region, only three experienced declines. The largest increases were in Brazil, in both Rio de Janeiro (17.7%) and São Paulo (15.9%). In Brazil, recovery started in 2Q2009, so the annual change is reflective of the trough for the office market. In Rio de Janeiro and São Paulo, newly completed Class A+ space is contributing to rising office occupancy costs.

Top Ten Most Expensive Markets

(In US$ per SF per annum) US$/SF/annum
1.) London West End, United Kingdom 182.94
2.) Hong Kong (Central CBD) 153.20
3.) Tokyo, (Inner Central), Japan 143.99
4.) Mumbai, India 125.76
5.) Moscow, Russian Federation 125.10
6.) Tokyo (Outer Central), Japan 118.41
7.) Paris Ile-de-France, France 113.23
8.) London City, United Kingdom 110.07
9.) Dubai, United Arab Emirates 108.92
10.) São Paulo, Brazil 100.00
Fastest Changing Occupancy Costs
(In local currency & measure)
Top 5 Decreases % Change
1.) Singapore, Singapore -36.2
2.) Ho Chi Minh City, Vietnam -30.9
3.) Perth, Australia -27.4
4.) Moscow, Russian Federation -26.5
5.) Tokyo, (Inner Central), Japan -25.9
Top 5 Increases % Change
1.) Rio de Janeiro, Brazil 17.7
2.) São Paulo, Brazil 15.9
3.) Tel Aviv, Israel 13.8
4.) San Salvador, El Salvador 10.2
5.) Seoul (CBD), South Korea 9.5

Note: The full Top 50 Most Expensive Markets chart is located at the end of this press release.

About CB Richard Ellis

CB Richard Ellis Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world's largest commercial real estate services firm (in terms of 2009 revenue). The Company has approximately 29,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CB Richard Ellis offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. CB Richard Ellis has been named a BusinessWeek 50 "best in class" company for three years in a row. Please visit our Web site at www.cbre.com.

Notes to Editors

  1. Global MarketView/Office Occupancy Costs is a survey of office occupation costs for prime office space in nearly 180 cities worldwide.
  2. The latest survey provides data on office rents and occupancy costs as of March 31, 2010
  3. The Fastest Changing rankings are based upon occupancy costs in local currency and measure. The Most Expensive ranking is based upon occupancy costs in US$ per sq. ft. per annum.
  4. The figures given in this release refer to occupancy cost. This represents rent, plus local taxes and service charges. The occupation cost figures have also been adjusted to reflect different measurement practices from market to market.
  5. To obtain a full copy of the report or to arrange to speak with a CBRE expert, please contact Robert McGrath at 212-984-8267 or robert.mcgrath@cbre.com.

Top 50 Most Expensive Office Markets as of March 31, 2010

Rank Market US$/sq ft/annum EUR /sq m/annum £/sq ft/annum Aus $/sq m/annum Can$/sq ft/annum ¥ /sq ft/annum
1 London West End, United Kingdom 182.94 1457.59 120.50 2,148 185.72 17,098
2 Hong Kong (Central CBD) 153.20 1220.59 100.91 1,799 155.53 14,318
3 Tokyo, (Inner Central), Japan 143.99 1147.21 94.84 1,691 146.18 13,457
4 Mumbai, India 125.76 1002.01 82.84 1,477 127.67 11,754
5 Moscow, Russian Federation 125.10 996.74 82.40 1,469 127.00 11,692
6 Tokyo (Outer Central), Japan 118.41 943.43 77.99 1,391 120.21 11,067
7 Paris Ile-de-France, France 113.23 902.15 74.58 1,330 114.95 10,582
8 London City, United Kingdom 110.07 876.98 72.50 1,293 111.74 10,287
9 Dubai, United Arab Emirates 108.92 867.84 71.75 1,279 110.58 10,180
10 São Paulo, Brazil 100.00 796.74 65.87 1,174 101.52 9,346
11 New Delhi, India 96.90 772.08 63.83 1,138 98.38 9,057
12 Rio de Janeiro, Brazil 95.63 761.93 62.99 1,123 97.08 8,938
13 Luxembourg City, Luxembourg 81.84 652.07 53.91 961 83.09 7,649
14 Hong Kong (Citywide) 80.27 639.58 52.87 943 81.49 7,502
15 Geneva, Switzerland 80.25 639.38 52.86 942 81.47 7,500
16 Zurich, Switzerland 78.48 625.32 51.70 922 79.68 7,335
17 Istanbul, Turkey 78.44 624.96 51.67 921 79.63 7,331
18 Milan, Italy 77.93 620.88 51.33 915 79.11 7,283
19 Abu Dhabi, United Arab Emirates 72.71 579.28 47.89 854 73.81 6,795
20 Seoul (CBD), South Korea 71.82 572.24 47.31 843 72.91 6,712
21 Frankfurt am Main, Germany 69.64 554.84 45.87 818 70.70 6,508
22 Edinburgh, United Kingdom 67.56 538.28 44.50 793 68.59 6,314
23 Manchester, United Kingdom 67.56 538.28 44.50 793 68.59 6,314
24 Dublin, Ireland 67.02 534.00 44.15 787 68.04 6,264
25 Stockholm, Sweden 65.68 523.33 43.26 771 66.68 6,139
26 New York Midtown, U.S. 64.51 513.98 42.49 758 65.49 6,029
27 Birmingham, United Kingdom 63.76 508.04 42.00 749 64.73 5,959
28 Rome, Italy 63.45 505.49 41.79 745 64.41 5,930
29 Gothenburg, Sweden 62.31 496.48 41.04 732 63.26 5,824
30 Athens, Greece 61.46 489.68 40.48 722 62.39 5,744
31 Glasgow, United Kingdom 60.73 483.85 40.00 713 61.65 5,676
32 Madrid, Spain 60.69 483.53 39.97 713 61.61 5,672
33 Shanghai (Pudong), China 60.14 479.16 39.61 706 61.05 5,621
34 Toronto (CBD), Canada 59.86 476.93 39.43 703 60.77 5,595
35 Perth, Australia 59.29 472.42 39.06 696 60.19 5,542
36 Aberdeen, United Kingdom 59.21 471.75 39.00 695 60.11 5,534
37 Singapore, Singapore 57.49 458.05 37.87 675 58.36 5,373
38 Oslo, Norway 57.20 455.76 37.68 672 58.07 5,346
39 Vancouver (CBD), Canada 55.49 442.09 36.55 652 56.33 5,186
40 Leeds, United Kingdom 54.66 435.46 36.00 642 55.49 5,108
41 Munich, Germany 54.62 435.16 35.98 641 55.45 5,105
42 Sydney (Core), Australia 53.29 424.58 35.10 626 54.10 4,980
43 Shanghai (Puxi), China 52.96 421.95 34.88 622 53.76 4,950
44 Buenos Aires, Argentina 52.02 414.47 34.26 611 52.81 4,862
45 Washington, DC (CBD), U.S. 51.75 412.31 34.09 608 52.54 4,837
46 Tel Aviv, Israel 51.56 410.81 33.96 605 52.34 4,819
47 Jersey, United Kingdom 51.24 408.25 33.75 602 52.02 4,789
48 Beijing, China 51.08 407.00 33.65 600 51.86 4,774
49 Calgary (CBD), Canada 50.92 405.67 33.54 598 51.69 4,759
50 Amsterdam, Netherlands 50.32 400.91 33.14 591 51.08 4,703

Source: CB Richard Ellis Global Research and Consulting

SOURCE: CB Richard Ellis Group, Inc.

CB Richard Ellis Group, Inc.
Robert McGrath, 212-984-8267
robert.mcgrath@cbre.com
Categories: Press Releases
View all news