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London (West End) Again World’s Most Expensive Office Market; Tokyo’s Inner Central Market Ranks Second
CB Richard Ellis Group, Inc. Report Finds Global Rents Continue Decline
Los Angeles — December 1, 2009 — London’s West End is again 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. Tokyo’s Inner Central has slipped to second place, followed by that city’s Outer Central market. Hong Kong’s Central Business District (CBD) and Moscow are fourth and fifth respectively in the CBRE report, which tracks office occupancy costs in nearly 180 cities around the globe.
Office markets worldwide are experiencing declines in prime office occupancy costs. The year-over-year change in prime office occupancy costs of the 179 markets monitored revealed an average drop of 7.7% worldwide over the 12-month period ending September 30, 2009 (in local currency and on an un-weighted average basis). The majority of markets – 131 markets in total – experienced a year-over-year decline including nearly 50 which saw rents tumble by double-digit percentage-points.
Many of the world’s bellwether financial centers are at the top of the list of fastest changing markets, including Hong Kong Central CBD(-40.7%) and New York, Midtown(-29.7%) along with emerging markets such as Ho Chi Minh City(-45.4%) and Abu Dhabi(-38.6%). Kiev led the world with the largest year-over-year decrease in office occupancy costs, falling 64.6% from year-ago levels.
“While there are signs that commercial real estate values are stabilizing in some markets in Asia and parts of London, underlying property fundamentals are still weak,” said Dr. Raymond Torto, CBRE’s Global Chief Economist. ”However the office market may be on the cusp of moving from intensive care to the stabilization stage - the first step to getting back to good health.”
Forty-one markets experienced positive growth. Aberdeen, Scotland and Rio de Janeiro, Brazil both grew by more than 10% as not all markets have been as affected by the decline in global demand and demand for office space has proven resilient in some areas due to the local market dynamics.
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.
Asia-Pacific
Tokyo (Inner Central) was Asia’s most expensive market with an occupancy cost of $172 per sq. ft. while that city’s Outer Circle market was second with occupancy costs of $139 per sq. ft. Hong Kong (CBD) follows with occupancy costs of $138 per sq. ft. Mumbai and New Delhi were the other two Asia-Pacific markets in the world’s top 10 most expensive cities roster. For the Asia Pacific region, the office markets that experienced the largest decreases include Singapore (-53.4%), Ho Chi Minh City (-45.4%), as well Hong Kong which declined over 30% in the past year. The Asia-Pacific region had 17 cities with double-digit declines in office occupancy costs.
Europe
London’s West End was the world’s most expensive office market at $185 per sq. ft. Moscow was second in Europe with occupancy costs at $132 per sq. ft. Dubai, Paris and the City of London all were in the top ten most expensive markets. Kiev led the world with the largest year-over-year decrease in office occupancy costs, falling 64.6% from year-ago levels. Other markets in Europe that are experiencing the largest decreases include Moscow, Oslo, Warsaw and Dublin. The EMEA region had 17 cities with double-digit declines in office occupancy costs.
Americas
Two cities in Brazil -- Rio de Janeiro and São Paolo -- have supplanted New York’s Midtown as the most expensive office location in the Americas. Rio de Janeiro’s occupancy costs of $87 per sq. ft., was good for twelfth place on the global list, while São Paulo came in at 16th globally with occupancy averaging $82 per sq. ft. New York’s Midtown’s market has dropped to third in the Americas and 24th globally with occupancy costs of $69 per sq. ft. Boston’s CBD led the Americas, with a decline of 33.9% year-over-year, followed by New York’s Downtown and Midtown markets. Fifteen markets in North America posted double-digit declines. Meanwhile, Latin America held up stronger than the rest of the world, with only six cities registering a decline, including a 6.3% decrease in Buenos Aires, Argentina.
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Top Ten
Most Expensive Markets |
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Fastest Changing
Occupancy Costs |
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(In US$ per sq. ft. per annum)
1. London (West End)
2. Tokyo, (Inner Central)
3. Tokyo (Outer Central)
4. Hong Kong (CBD)
5. Moscow
6. Paris
7. Mumbai
8. Dubai
9. London (City)
10. New Delhi (CBD) |
US$/SF/annum
184.85
171.64
139.09
137.61
131.55
122.51
121.11
108.91
108.83
88.92 |
(In local currency & measure)
Top 5 Decreases
1. Kiev (Ukraine)
2. Singapore
3. Ho Chi Minh City
4. Hong Kong (CBD)
5. Abu Dhabi
Top 5 Increases
1. Aberdeen (Scotland)
2. Rio de Janeiro
3. Istanbul
4. Panama City
5. Edmonton |
% Change
-64.6
-53.4
-45.4
-40.7
-38.6
12.3
12.1
9.0
7.7
5.8 |
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Note: The full Top 50 Most Expensive Markets chart is located at the end of this press release.
About CB Richard Ellis
CB Richard Ellis Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services firm (in terms of 2008 revenue). The Company has approximately 30,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CB Richard Ellis offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. CB Richard Ellis has been named a BusinessWeek 50 “best in class” company three years. Please visit our Web site at www.cbre.com.
Notes to Editors
- Global MarketView/Office Occupancy Costs is a survey of office occupation costs for prime office space in nearly 180 cities worldwide.
- The latest survey provides data on office rents and occupancy costs as of September 30, 2009.The Fastest Changing rankings are based upon occupancy costs in local currency and measure. The Most Expensive ranking is based upon occupancy costs in US$ per sq. ft. per annum. 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.
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 September 30, 2009
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Rank |
Market |
US$/sq ft/ annum |
€/sq m/ month |
£/sq ft/ annum |
Aus$/sq m/ annum |
Can$/sq ft/annum |
¥/sq ft/ annum |
|
1 |
London (West End), England |
184.85 |
113.29 |
115.50 |
2,252 |
197.60 |
16,590 |
|
2 |
Tokyo (Inner Central), Japan |
171.64 |
105.20 |
107.25 |
2,091 |
183.48 |
15,405 |
|
3 |
Tokyo, (Outer Central), Japan |
139.09 |
85.25 |
86.91 |
1,695 |
148.68 |
12,483 |
|
4 |
Hong Kong (Central CBD) |
137.61 |
84.34 |
85.98 |
1,677 |
147.10 |
12,350 |
|
5 |
Moscow, Russia |
131.55 |
80.63 |
82.20 |
1,603 |
140.63 |
11,807 |
|
6 |
Paris, France |
122.51 |
75.09 |
76.55 |
1,493 |
130.97 |
10,995 |
|
7 |
Mumbai (CBD), India |
121.11 |
74.23 |
75.67 |
1,476 |
129.46 |
10,869 |
|
8 |
Dubai, United Arab Emirates |
108.91 |
66.75 |
68.05 |
1,327 |
116.42 |
9,775 |
|
9 |
London (City), England |
108.03 |
66.21 |
67.50 |
1,316 |
115.48 |
9,696 |
|
10 |
New Delhi (CBD), India |
88.92 |
54.50 |
55.56 |
1,083 |
95.05 |
7,980 |
|
11 |
Luxembourg City, Luxembourg |
88.66 |
54.34 |
55.40 |
1,080 |
94.77 |
7,957 |
|
12 |
Rio de Janeiro, Brazil |
87.47 |
53.61 |
54.66 |
1,066 |
93.51 |
7,850 |
|
13 |
Milan, Italy |
84.42 |
51.74 |
52.75 |
1,029 |
90.24 |
7,576 |
|
14 |
Abu Dhabi, United Arab Emirates |
84.40 |
51.73 |
52.74 |
1,028 |
90.23 |
7,575 |
|
15 |
Zurich, Switzerland |
83.41 |
51.13 |
52.12 |
1,016 |
89.17 |
7,486 |
|
16 |
São Paulo, Brazil |
81.81 |
50.14 |
51.12 |
997 |
87.45 |
7,342 |
|
17 |
Dublin, Ireland |
81.31 |
49.83 |
50.80 |
991 |
86.92 |
7,297 |
|
18 |
Geneva, Switzerland |
78.93 |
48.38 |
49.32 |
962 |
84.38 |
7,084 |
|
19 |
Istanbul, Turkey |
77.44 |
47.46 |
48.39 |
944 |
82.78 |
6,950 |
|
20 |
Frankfurt am Main, Germany |
75.44 |
46.24 |
47.14 |
919 |
80.64 |
6,770 |
|
21 |
Hong Kong (Citywide) |
75.20 |
46.09 |
46.99 |
916 |
80.39 |
6,749 |
|
22 |
Edinburgh, Scotland |
72.02 |
44.14 |
45.00 |
878 |
76.99 |
6,464 |
|
23 |
Manchester, England |
71.22 |
43.65 |
44.50 |
868 |
76.13 |
6,392 |
|
24 |
New York Midtown, U.S. |
68.93 |
42.25 |
43.07 |
840 |
73.69 |
6,186 |
|
25 |
Rome, Italy |
68.73 |
42.12 |
42.94 |
837 |
73.47 |
6,168 |
|
26 |
Stockholm, Sweden |
67.94 |
41.64 |
42.45 |
828 |
72.63 |
6,098 |
|
27 |
Madrid, Spain |
67.66 |
41.47 |
42.28 |
824 |
72.33 |
6,073 |
|
28 |
Birmingham, England |
67.22 |
41.20 |
42.00 |
819 |
71.85 |
6,033 |
|
29 |
Glasgow, Scotland |
66.42 |
40.71 |
41.50 |
809 |
71.00 |
5,961 |
|
30 |
Aberdeen, Scotland |
65.62 |
40.22 |
41.00 |
800 |
70.14 |
5,889 |
|
31 |
Athens, Greece |
64.38 |
39.46 |
40.23 |
785 |
68.83 |
5,779 |
|
32 |
Singapore, Singapore |
63.89 |
39.16 |
39.92 |
779 |
68.30 |
5,734 |
|
33 |
Seoul (CBD), South Korea |
63.26 |
38.78 |
39.53 |
771 |
67.63 |
5,678 |
|
34 |
Perth, Australia |
63.16 |
38.71 |
39.46 |
770 |
67.52 |
5,668 |
|
35 |
Leeds, England |
62.42 |
38.26 |
39.00 |
761 |
66.72 |
5,602 |
|
36 |
Munich, Germany |
61.86 |
37.91 |
38.65 |
754 |
66.12 |
5,552 |
|
37 |
Bristol, England |
60.82 |
37.27 |
38.00 |
741 |
65.01 |
5,458 |
|
38 |
Toronto (CBD), Canada |
60.78 |
37.25 |
37.98 |
741 |
64.97 |
5,455 |
|
39 |
Shanghai (Pudong), China |
59.41 |
36.41 |
37.12 |
724 |
63.50 |
5,332 |
|
40 |
Oslo, Norway |
58.51 |
35.86 |
36.56 |
713 |
62.55 |
5,251 |
|
41 |
Amsterdam, Netherlands |
54.44 |
33.37 |
34.02 |
663 |
58.20 |
4,886 |
|
42 |
Brussels, Belgium |
54.06 |
33.13 |
33.78 |
659 |
57.79 |
4,851 |
|
43 |
Jersey, England |
54.01 |
33.11 |
33.75 |
658 |
57.74 |
4,848 |
|
44 |
Shanghai (Puxi), China |
53.32 |
32.68 |
33.32 |
650 |
57.00 |
4,785 |
|
45 |
Warsaw, Poland |
52.57 |
32.22 |
32.85 |
641 |
56.20 |
4,718 |
|
46 |
Prague, Czech Republic |
52.55 |
32.21 |
32.84 |
640 |
56.18 |
4,717 |
|
47 |
Vancouver (CBD), Canada |
52.44 |
32.14 |
32.77 |
639 |
56.06 |
4,707 |
|
48 |
Sydney (Core), Australia |
52.05 |
31.90 |
32.52 |
634 |
55.64 |
4,671 |
|
49 |
Calgary (CBD), Canada |
51.91 |
31.82 |
32.43 |
632 |
55.49 |
4,659 |
|
50 |
Washington, DC (CBD), U.S. |
51.74 |
31.71 |
32.33 |
630 |
55.31 |
4,644 |
Source: CB Richard Ellis Research
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