London office buildings have the highest office rents/occupancy costs in the world, while Hong Kong is second according to a new study by CBRE Group
The Downtown Houston office market ranks No. 47 in rent/occupancy costs, the CBRE study reported. It is the highest priced office market in Texas.
Markets with the fastest growing office space occupancy costs are Dublin, Seattle and Panama City, according to CBRE Research’s semi-annual Global Price Office Occupancy Costs Survey. The rankings are based on “occupancy cost” – which represents rent, plus local taxes and service charges.
London West End’s overall prime occupancy costs of $267 per sq. ft. per year topped the “most expensive” list. Hong Kong (Central) followed with total prime occupancy costs of $254 per sq. ft., Beijing (Finance Street) ($196 per sq. ft.), Beijing (Central Business District (CBD)) ($188 per sq. ft.) and New Delhi (Connaught Place – CBD) ($157 per sq. ft.) rounded out the top five.
Among U.S. cities, New York was at $127 per sq. ft; San Francisco was a $114 and Downtown Houston was at $62.50.
The change in prime office occupancy costs mirrored the gradual recovery of the global economy. Global prime office occupancy costs rose 2.0 percent year-over-year, with the Americas up 2.9 percent, EMEA rising 1.5 percent and Asia Pacific up 1.4 percent.
“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,” said Richard Barkham, Global Chief Economist, CBRE. “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.”
CBRE tracks occupancy costs for prime office space in 127 markets around the globe. Of the top 50 “most expensive” markets, 19 were in EMEA, 20 were in Asia Pacific and 11 were in the Americas.