New York’s Midtown Ranked Third Among Global Markets
Hong Kong (Central) and London’s West End topped the list of prime office occupancy costs again, according to CBRE Research’s latest annual Global Prime Office Occupancy Costs report.
Hong Kong (Central) and London’s West End remained the two most expensive office locations in the world. Hong Kong’s (Central) overall prime occupancy costs of US$303 per sq. ft. per year topped the “most expensive” list, followed by London’s West End (US$214 per sq. ft.), New York (Midtown) (US$203 per sq. ft.), Hong Kong (West Kowloon) (US$190 per sq. ft.) and Beijing (Central Business District (CBD)) (US$183 per sq. ft.).
“The global top-10 list reflects the ongoing strength of global gateway cities in attracting and maintaining a successful occupier base,” said Richard Barkham, global chief economist, CBRE.
Global prime office occupancy costs—which reflect rent, plus local taxes and service charges for the highest-quality, “prime” office properties—rose 1.9 percent year-over-year, with the Americas up 3.6 percent, EMEA up 0.8 percent and Asia Pacific up 1.2 percent.
Durban (South Africa) had the highest increase in occupancy cost overall, though Stockholm (Sweden) registered some of the fastest growth in Europe, along with Palma de Mallorca (Spain), Belfast (U.K.) and Amsterdam (Netherlands). In Asia Pacific, Shanghai (Puxi) in China had the highest growth in occupancy cost, followed by Guangzhou, Bangalore and Shanghai (Pudong). Buenos Aires showed the biggest increase in the Americas overall, while suburban Denver, suburban Houston and New York Midtown South saw the largest occupancy-cost increases in the U.S.
CBRE tracks occupancy costs for prime office space in 121 markets around the globe. Of the top 50 “most expensive” markets, 21 were in Asia Pacific, 16 were in EMEA and 13 were in the Americas.
In London’s West End, the fall in occupancy costs is largely due to a fall in rents triggered by more subdued demand, particularly amongst financial occupiers who have become less willing to pay the high rents prevailing in London’s premier market.
Occupier efforts to reduce occupancy costs due to the ongoing strength of the Swiss franc relative to the euro have resulted in falls in Swiss markets, including Geneva and Zurich.
In Singapore, occupancy costs continued to fall, thanks to increased supply of office stock and weak levels of inflation.
Asia Pacific was home to seven of the top 10 most expensive markets—Hong Kong (Central), Hong Kong (West Kowloon), Beijing (CBD), Beijing (Finance Street), Tokyo (Marunouchi/Otemachi), New Delhi (Connaught Place - CBD), and Shanghai (Pudong).
Hong Kong (Central) is the only market in the world with a prime occupancy cost exceeding US$300 per sq. ft.
The most expensive market in the global ranking from the Pacific Region was Sydney (US$97 per sq. ft.), in 19th place.
New York Midtown, number three on the global list, remained the most expensive market in the Americas, with a prime office occupancy cost of US$203 per sq. ft. New York Midtown South took the eighth spot on the list with a prime office occupancy cost of US$156 per sq. ft.
Sao Paulo was the most expensive market in Latin America, posting an office occupancy cost of US$69 per sq. ft. and ranking as the 35th most expensive market globally.
Top 10
Most Expensive Markets
(In US$ per sq. ft. per
annum)
Rank |
Market |
Occupancy Cost |
1 |
Hong
Kong (Central), Hong Kong |
302.51 |
2 |
London
(West End), United Kingdom |
213.85 |
3 |
New
York (Midtown Manhattan), U.S. |
202.79 |
4 |
Hong
Kong (West Kowloon), Hong Kong |
190.02 |
5 |
Beijing
(CBD), China |
183.10 |
6 |
Beijing
(Finance Street), China |
170.29 |
7 |
Tokyo
(Marunouchi/Otemachi), Japan |
161.76 |
8 |
New
York (Midtown-South Manhattan), U.S. |
156.19 |
9 |
New
Delhi (Connaught Place - CBD), India |
153.89 |
10 |
Shanghai (Pudong), China |
133.82 |
Largest Annual Changes
Occupancy Costs
(In local currency and measure)
Top 5 Increases
Rank |
Market |
% Change |
1 |
Durban,
South Africa |
21.2 |
2 |
Buenos
Aires, Argentina |
20.0 |
3 |
Stockholm,
Sweden |
18.8 |
4 |
Denver (Suburban), U.S. |
17.2 |
5 |
Palma
de Mallorca, Spain |
16.5 |
Top
5 Decreases
Rank |
Market |
% Change |
1 |
Jakarta, Indonesia |
-19.6 |
2 |
Moscow,
Russian Federation |
-18.0 |
3 |
Geneva,
Switzerland |
-9.8 |
4 |
Hanoi,
Vietnam |
-7.4 |
5 |
Calgary (Downtown), Canada |
-6.7 |
Top 50 Most Expensive
Office Markets
(In
US$ per sq. ft. per annum)
Rank
(Q1
2017) |
Market |
Occupancy Cost |
1 |
Hong
Kong (Central), Hong Kong |
302.51 |
2 |
London
(West End), United Kingdom |
213.85 |
3 |
New
York (Midtown Manhattan), U.S. |
202.79 |
4 |
Hong
Kong (West Kowloon), Hong Kong |
190.02 |
5 |
Beijing
(CBD), China |
183.10 |
6 |
Beijing
(Finance Street), China |
170.29 |
7 |
Tokyo
(Marunouchi/Otemachi), Japan |
161.76 |
8 |
New
York (Midtown-South Manhattan), U.S. |
156.19 |
9 |
New
Delhi (Connaught Place - CBD), India |
153.89 |
10 |
Shanghai (Pudong), China |
133.82 |
11 |
London
(City), United Kingdom |
130.17 |
12 |
Moscow,
Russian Federation |
118.70 |
13 |
Shanghai
(Puxi), China |
113.02 |
14 |
San
Francisco (Downtown), U.S. |
112.71 |
15 |
Dubai,
United Arab Emirates |
106.17 |
16 |
Boston
(Downtown), U.S. |
102.50 |
17 |
Seoul (CBD), South Korea |
100.62 |
18 |
Paris,
France |
100.55 |
19 |
Sydney,
Australia |
97.17 |
20 |
Mumbai
(Bandra Kurla Complex), India |
96.91 |
21 |
San
Francisco (Peninsula), U.S. |
96.84 |
22 |
New York (Downtown Manhattan), U.S. |
91.18 |
23 |
Washington,
D.C. (Downtown), U.S. |
90.15 |
24 |
Los
Angeles (Suburban), U.S. |
89.57 |
25 |
Seoul
(Yeouido), South Korea |
89.27 |
26 |
Shenzhen,
China |
86.65 |
27 |
Singapore,
Singapore |
85.02 |
28 |
Geneva,
Switzerland |
80.76 |
29 |
Dublin,
Ireland |
80.59 |
30 |
Stockholm,
Sweden |
80.34 |
31 |
Istanbul,
Turkey |
75.06 |
32 |
Zurich,
Switzerland |
73.33 |
33 |
Mumbai
(Nariman Point - CBD), India |
73.10 |
34 |
Guangzhou,
China |
69.57 |
35 |
São
Paulo, Brazil |
69.47 |
36 |
Taipei,
Taiwan |
67.92 |
37 |
Manchester,
United Kingdom |
64.72 |
38 |
Tel
Aviv, Israel |
63.70 |
39 |
Ho
Chi Minh City, Vietnam |
63.61 |
40 |
Houston
(Downtown), U.S. |
63.10 |
41 |
Birmingham,
United Kingdom |
62.53 |
42 |
Milan,
Italy |
61.70 |
43 |
Seattle
(Downtown), U.S. |
61.12 |
44 |
Edinburgh,
United Kingdom |
59.40 |
45 |
Helsinki,
Finland |
59.07 |
46 |
Seattle
(Suburban), U.S. |
58.35 |
47 |
Perth, Australia |
57.60 |
48 |
Chicago
(Downtown), U.S. |
57.51 |
49 |
Brisbane,
Australia |
57.03 |
50 |
Jakarta,
Indonesia |
57.02 |
Source: CBRE Research, Q1 2017.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas is the world’s largest commercial real estate services and investment firm (based on 2019 revenue). The company has more than 100,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 530 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.