Skip Ribbon Commands Skip to main content

Hong Kong Central Remains World's Most Expensive Office Market; Four of Five Priciest Markets in Asia

​Jakarta Records Fastest Rise in Prime Occupancy Costs

Energy Sector Fuels Jump in Houston; Midtown Manhattan Returns to Top 10 

Prime Occupancy Cost Growth is Restrained Overall 

New York City — June 21, 2013 — The dominance of Asia in the world’s most expensive office locations continued, as Hong Kong-Central remained the highest priced market and four other Asian markets populated the top five, according to CBRE Global Research and Consulting’s semi-annual Prime Office Occupancy Costs survey.

Hong Kong–Central’s overall occupancy costs of US$235.23 per sq. ft. per year topped the “most expensive” list for the third consecutive time. London’s West End followed with total occupancy costs of US$222.58. Beijing’s Finance Street, Beijing’s Jianguomen CBD and New Delhi’s Connaught Place CBD rounded out the top five.

Other Asia-Pacific markets in the top ten include Hong Kong-West Kowloon (6th) and Tokyo (Marunouchi/Otemachi) (8th). New York’s Midtown Manhattan (10th) returned to the top ten markets for the first time since early 2012, joined by Moscow (7th) and London’s City (9th).

Globally, occupancy costs rose by a scant 1.4% on a year-over-year basis as modest growth in the Americas and Asia Pacific was partly offset by a slight decrease in recessionary Europe. However, the modest global average uptick masked significant increases in markets like Jakarta, Indonesia and suburban Houston, Texas, which posted increases of 38.9% and 21.2%, respectively.

“While the pace of occupancy cost growth globally has slowed, limited supply of prime space in key core business centers has fueled continuous upward movement of occupancy costs,” said Dr. Raymond Torto, CBRE’s Global Chief Economist. “The most expensive office markets often attract the regional headquarters of large multinational firms that require a prime location in a prestigious building with access to major global and regional transit routes.”

CBRE tracks occupancy costs for prime office space in 127 markets around the globe. Of the top 50 “most expensive” markets, 21 are in Asia-Pacific, 18 are in EMEA and 11 in the Americas.  

While comparisons in dollars are affected by currency exchange rates, annual percent change calculations are based upon occupancy costs in local currency and are not influenced by currency changes.

Asia Pacific

Asia-Pacific had 21 markets ranked in the top 50 most expensive, including six of the top ten— Hong Kong Central, Beijing’s Finance Street, Beijing’s Jianguomen CBD, New Delhi’s Connaught Place CBD, Hong Kong-West Kowloon and Tokyo (Marunouchi/Otemachi).

Hong Kong Central’s position as the most expensive office market continues to be bolstered by its status as a leading global financial center. Although financial institutions have become more cost sensitive, with some considering relocating to less expensive space outside the CBD, high-quality and premium space is still sought after, especially by mainland Chinese firms which are increasingly setting up their offices in Hong Kong (Central) in prestigious buildings.

Asia also had the markets with both the sharpest annual increase and decrease among the markets tracked. Jakarta’s 38.9% increase was driven by a substantial recovery in domestic demand in the wake of Indonesian sovereign debt’s return to investment-grade status, which energized leveraged investment initiatives and drove up demand for prime office space across the capital. Singapore experienced the largest annual decrease worldwide (-16.3%) due, in part, to increases in both new supply and the availability of lower-priced secondary space. The bulk of the rental decline occurred in early 2012, with only minimal rental corrections in the second half of 2012 and in Q1 2013.

The most expensive market in the global ranking from the Pacific Region was Sydney (US$119.23 per sq. ft.), which came in at 13th.

Americas
North America was again led by New York’s Midtown, which posted a prime office occupancy cost of US$120.65 per sq. ft., reflecting a 5.6% year-over-year increase. The New York Midtown market jumped to 10th globally, marking its first return to the top ten most expensive office locations since the beginning of 2012, reflecting continued demand for premium space by top tier investment and legal firms.

Energy markets, such as Denver, Calgary and Houston, reported the strongest annual prime office occupancy gains, with Houston’s Suburban and Downtown office markets witnessing significant increases in year-over-year occupancy costs, of 21.2% and 14.9% respectively. High-tech markets also saw rising costs, including San Francisco (Downtown), Boston (Downtown and Suburban), and Seattle (Downtown and Bellevue CBD). Prime costs in Boston’s Downtown surged, rising 15.4%. Across most of the fast-growing energy and high-tech markets, new supply is limited given the requirement of a high level of pre-leasing before any new construction can be financed.

In Latin America, São Paulo remains the most expensive market, posting an office occupancy cost of US$118.86 per sq. ft., and ranks as the 14th most expensive market globally.

Europe Middle East & Africa (EMEA)
In addition to London’s West End ranking as the world’s second-most expensive market, other markets from the region in the list’s top ten are Moscow (occupancy cost of US$165.05 per sq. ft.) and London’s City (US$132.94 per sq. ft.).

Struggling economic conditions and cost-containment initiatives led to lower demand for office space and restrained pricing across many Southern European markets including Madrid, Milan, Rome, Athens and a number of smaller markets such as Valencia and Oporto.

Top Ten
Most Expensive Markets
(In US$ per sq. ft. per annum)

Rank

​Market

​Occ. Cost

1

2

3

4

5

6

7

8

9

10

Hong Kong (Central), Hong Kong

London - Central (West End), United Kingdom

Beijing (Finance Street), China

Beijing (CBD), China

New Delhi (Connaught Place - CBD), India

Hong Kong (West Kowloon), Hong Kong

Moscow, Russian Federation

Tokyo (Marunouchi/Otemachi), Japan

London - Central (City), United Kingdom

New York (Midtown Manhattan),U.S.

235.23

222.58

195.07

187.06

178.96

173.90

165.05

161.16

132.94

120.65​

Largest Annual Changes
Occupancy Costs
(In local currency & measure) 

Top 5 Increases

Rank

​Market

​% Change

1

2

3

4

5​

Jakarta, Indonesia

Houston (Suburban),U.S.​

Boston (Downtown), U.S.

Houston (Downtown), U.S.

Manila, Philippines

38.9

21.2

15.4

14.9

14.9​

Top 5 Decreases

Rank

​Market

​% Change

1

2

3

4

5​

Singapore, Singapore

Guadalajara, Mexico

Buenos Aires, Argentina

Valencia, Spain

Oporto, Portugal

16.3

16.1

11.0

10.3

9.6​

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

Notes to Editors

1. The Prime Office Occupancy Costs report is a survey of office occupancy costs for prime office space in 127 cities worldwide.

2. The latest survey provides data on office rents and occupancy costs as of March 31, 2013.

3. The Largest Annual Changes 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. Due to methodology changes comparisons with figures in previously released reports are not valid.

6. 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, 2013
(In US$ per sq. ft. per annum)

Rank​

​Market

​Occ. Cost

3  

4  

5  

6  

7  

8  

10 

11  

12  

13  

14  

15  

16  

17  

18  

19  

20   

21 

22   

23   

24  

25  

26  

27   

28  

29 

30  

31  

32  

33 

34 

35  

36  

37  

38  

39  

40  

41  

42 

43 

44  

45 

46 

47  

48 

49 

50  ​

 Hong Kong (Central), Hong Kong ​

 London - Central (West End), United Kingdom 

Beijing (Finance Street), China 

Beijing (Jianguomen - CBD), China 

New Delhi (Connaught Place - CBD), India

Hong Kong (West Kowloon), Hong Kong 

Moscow, Russian Federation 

Tokyo (Marunouch/Otemachi), Japan

London - Central (City), United Kingdom 

New York (Midtown Manhattan), U.S.

Mumbai (Bandra Kurla Complex), India

Paris, France

Sydney, Australia

São Paulo, Brazil 

Shanghai (Pudong), China 

Rio de Janeiro, Brazil 

Shanghai (Puxi), China 

Geneva, Switzerland 

Singapore, Singapore 

Washington, D.C. (Downtown), U.S.

Perth, Australia 

San Francisco (Downtown), U.S.

Boston (Downtown), U.S.

Seoul (CBD), South Korea 

Dubai, United Arab Emirates 

Mumbai (Nariman Point - CBD), India 

Zurich, Switzerland

Istanbul, Turkey 

Brisbane, Australia 

Los Angeles (Suburban), U.S.

Seoul (Yeouido), South Korea 

Stockholm, Sweden 

New York (Downtown Manhattan), U.S. 

Caracas, Venezuela 

Guangzhou, China 

Milan, Italy 

Manchester, United Kingdom 

Aberdeen, United Kingdom 

Edinburgh, United Kingdom 

Taipei, Taiwan 

Oslo, Norway 

 Birmingham, United Kingdom 

Frankfurt, Germany 

Ho Chi Minh City, Vietnam 

Bristol, United Kingdom 

Jakarta, Indonesia 

Glasgow, United Kingdom 

San Francisco (Peninsula), U.S.

Melbourne, Australia 

Toronto (Downtown), Canada 

 

​235.23

222.58

194.07

187.06

178.96

173.90

165.05

161.16

132.94

120.65

119.93

119.32

119.23

118.86

117.68

113.06

109.21

104.24

99.65

97.80

97.09

96.00

93.75

93.69

92.57

90.67

87.11

85.45

79.10

79.10

77.74

76.65

74.93

74.66

73.71

71.31

69.13

67.99

67.61

67.60

67.07

66.39

66.06

64.90

63.05

62.50

62.29

62.10

61.89

61.40

 

Source: CBRE Global Research and Consulting, Q1 2013.

About CBRE Group, Inc.
CBRE 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 and investment firm (in terms of 2012 revenue).  The Company has approximately 37,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CBRE 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. Please visit our website at www.cbre.com.  

CBRE Offices Global

CBRE Offices Worldwide