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Tokyo Now World’s Most Expensive Office Market; West End of London and Moscow Ranked Second and Third, Respectively

CB Richard Ellis Group, Inc. Report Also Finds Global Occupancy Costs Down

Los Angeles — June 3, 2009 — Tokyo’s Inner Central District has supplanted London’s West End as the world’s most expensive office market, according to CB Richard Ellis Group, Inc. (CBRE) Global Research and Consulting’s semi-annual Global Office Occupancy Costs survey. London’s West End, is now the world’s second most expensive office market, followed by Moscow, Hong Kong’s Central Business District or CBD, and Tokyo’s Outer Central District in the CBRE report, which tracks office occupancy costs in more than 170 cities around the globe.

Financial centers have been most significantly affected by declining occupier demand and, as one would expect, registered the most material decreases in office rents. In many cases, major global office markets have seen occupancy costs fall by 20% or more over the last 12 months. Across the 170 cities as a whole, office occupancy costs fell 2.8% over the 12 month period ending March 31, 2009 (on an un-weighted average basis) compared with an increase of 8.0% in the 12 month period ending September 30, 2008 Singapore had the largest year over year decrease in occupancy costs with a drop of 34%.

Some markets did record increases in costs over the last 12 months but these markets—such as Charlotte (U.S.), Marseille (France) and Perth (Australia)—are very much the exception rather than the rule. Generally, these increases are either due to exceptional local market conditions, such as the completion of a top quality new building in a market where none was available previously, or simply that occupancy costs remain above the level of a year ago despite the fact that they are now falling. Such situations illustrate the uneven way in which the economic downturn is affecting different markets around the globe, according to the CBRE report.

“The great global recession has clearly taken its toll on the world’s office markets, particularly those with significant concentrations of financial industry employers,” said Dr. Raymond Torto, CBRE’s Global Chief Economist. ”The most expensive office markets, as measured in dollars, are considerably less expensive than a year ago and occupiers are now in a strong position to procure prime space at attractive costs. For instance, a year ago office space in London’s West end was nearly $300 per sq. ft., while today that space goes for $172 per sq. ft.”

Asia-Pacific
Tokyo (Inner Central) was the world’s most expensive market with an occupancy cost of $183 per sq. ft. Hong Kong (CBD) was the fourth most expensive global market with occupancy costs of $150 per sq. ft. Tokyo (Outer Central) and Mumbai were the other two Asia-Pacific markets in the top 10 most expensive cities roster.

Singapore, while experiencing the largest drop in occupancy costs, was not alone among Asia-Pacific financial centers in seeing a sharp decline. Hong Kong, Tokyo and Mumbai posted large drops in office occupancy costs. Conversely, Perth had the second fastest growing occupancy cost during the past 12 months with costs rising 22%, although it’s important to note that the increase took place in 2008.

Europe
London’s West End was the world’s second most expensive office market at $172 per sq. ft. and Moscow was a close third with occupancy costs at $170 per sq. ft. Dubai, Paris, the City of London and Dublin all were in the top ten most expensive markets.
Twelve cities in the region posted doubled digit declines in office cost. Moscow had the sharpest decline in the region followed closely by Oslo (Norway), while occupancy costs in London’s West End, previously the most expensive market in our report, fell 20%. In addition to Marseille, Durban (South Africa) was among the world’s top five markets with occupancy cost growing by 18% during the past 12 months.

Americas
The most expensive office location in the Americas is still New York’s Midtown with occupancy costs of $68 per sq. ft. However, that market’s occupancy costs declined 32%--the second steepest decline in the global survey. While occupancy costs in New York’s Midtown are high for North America, it ranked just 21st globally. Boston’s suburban market posted a decrease of nearly 30%, putting that market in fourth position in the top decreases chart in the report.

São Paulo (Brazil) posted the Latin American region’s highest occupancy costs at $57 per sq. ft. and is ranked 33rd globally. Latin America has held up better than the rest of the world with only three cities posting small negative growth rates, the worst being Mexico City with a 5.6 percent decrease. Nine markets in North America posted double digit declines.

 

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 in a row and a Fortune 100 fastest growing company two 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 more than 170 cities worldwide.
  2. The latest survey provides data on office rents and occupancy costs as of March 31, 2009
  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, 2009 (converted to U.S. dollars)

 

Rank

Market

 US$/sq ft/annum

€ /sq m/month

 £/sq ft/annum

Aus $/sq m/annum

Can$/sq ft/annum

¥  /sq ft/annum

1

Tokyo, (Inner Central), Japan

183.62

124.30

128.17

2,856

231.49

18,149

2

London (West End), England

172.62

116.85

120.49

2,685

217.62

17,061

3

Moscow, Russia

170.24

115.25

118.83

2,648

214.62

16,827

4

Hong Kong (CBD)

150.42

101.83

104.99

2,340

189.63

14,867

5

Tokyo (Outer Central), Japan

149.58

101.26

104.41

2,327

188.58

14,785

6

Mumbai, India

131.04

88.71

91.47

2,038

165.20

12,952

7

Dubai, United Arab Emirates

122.52

82.94

85.52

1,906

154.46

12,110

8

Paris, France

114.89

77.78

80.20

1,787

144.85

11,356

9

London (City), England

103.50

70.06

72.24

1,610

130.48

10,230

10

Dublin, Ireland

93.56

63.33

65.30

1,455

117.95

9,247

11

Abu Dhabi, United Arab Emirates

91.21

61.74

63.66

1,419

114.99

9,015

12

New Delhi, India

86.94

58.86

60.69

1,352

109.61

8,593

13

Paris La Defense, France

86.04

58.24

60.05

1,338

108.47

8,504

14

Hong Kong (Citywide)

84.47

57.18

58.96

1,314

106.49

8,349

15

Singapore, Singapore

82.79

56.04

57.78

1,288

104.37

8,183

16

Milan, Italy

80.89

54.76

56.46

1,258

101.98

7,996

17

Luxembourg City, Luxembourg

77.58

52.52

54.15

1,207

97.81

7,668

18

Zurich, Switzerland

76.69

51.91

53.53

1,193

96.68

7,580

19

Geneva, Switzerland

73.42

49.70

51.25

1,142

92.56

7,257

20

Ho Chi Minh City, Vietnam

70.27

47.57

49.05

1,093

88.59

6,945

21

New York  Midtown, U.S.

68.63

46.46

47.90

1,067

86.52

6,783

22

Frankfurt am Main, Germany

68.30

46.24

47.67

1,062

86.11

6,751

23

Edinburgh, Scotland

66.61

45.09

46.49

1,036

83.98

6,584

24

Madrid, Spain

66.47

45.00

46.40

1,034

83.80

6,570

25

Shanghai (Pudong), China

65.22

44.15

45.52

1,014

82.22

6,446

26

Rome, Italy

64.93

43.96

45.32

1,010

81.86

6,418

27

Manchester, England

63.75

43.15

44.49

991

80.36

6,301

28

Birmingham, England

63.03

42.67

43.99

980

79.46

6,230

29

Leeds, England

60.88

41.21

42.50

947

76.75

6,018

30

Perth, Australia

59.15

40.04

41.29

920

74.57

5,847

31

Glasgow, Scotland

58.73

39.76

41.00

914

74.04

5,805

32

Stockholm, Sweden

58.59

39.66

40.90

911

73.87

5,791

33

São Paulo, Brazil

57.74

39.09

40.30

898

72.79

5,707

34

Bristol, England

57.30

38.79

40.00

891

72.24

5,664

35

Rio de Janeiro, Brazil

57.26

38.76

39.97

891

72.19

5,660

36

Shanghai (Puxi), China

57.01

38.59

39.79

887

71.88

5,635

37

Munich, Germany

56.00

37.91

39.09

871

70.60

5,535

38

Oslo, Norway

54.75

37.07

38.22

852

69.03

5,412

39

Calgary, Canada (CBD)

54.57

36.94

38.09

849

68.80

5,394

40

Seoul, South Korea

54.18

36.68

37.82

843

68.30

5,355

41

Warsaw, Poland

54.16

36.67

37.81

842

68.28

5,354

42

Prague, Czech Republic

53.23

36.03

37.15

828

67.10

5,261

43

Aberdeen, Scotland

53.00

35.88

37.00

824

66.82

5,239

44

New York  Downtown, U.S.

52.92

35.82

36.94

823

66.72

5,231

45

Los Angeles (sub), U.S.

52.83

35.76

36.88

822

66.60

5,222

46

Toronto, Canada (CBD)

51.82

35.08

36.17

806

65.33

5,122

47

Washington, DC (CBD), U.S.

51.77

35.05

36.14

805

65.27

5,117

48

Athens, Greece

51.62

34.95

36.03

803

65.08

5,102

49

Brussels, Belgium

50.43

34.14

35.20

784

63.58

4,985

50

Beijing, China

49.44

33.47

34.51

769

62.32

4,886

 

 

 

Source: CB Richard Ellis Research 

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