London (West End) retained its position as the most expensive prime office market worldwide, followed by Hong Kong (Central) and Beijing (Finance Street). Shanghai (Pudong) dropped out of the top 10 most expensive ranking, while New York (Midtown Manhattan) moved up to 10th place.
Of the 127 office markets tracked globally, 62% (79 markets) recorded an annual increase in prime occupancy costs, 22% (28 markets) registered a decline and 16% (20 markets) saw no change, highlighting the slow but steady recovery of the office sector.
Of the 79 markets with occupancy cost growth, nine saw increases of at least 10%, led by Dublin, Seattle (Downtown) and Panama City. By contrast, of the 28 markets with decreases, only two were in double digits—Moscow and Buenos Aires.
Overall, occupancy cost increases were broadly in line with global inflation, rising 2.0% over the 12 months ending Q1 2015. Occupancy costs in EMEA and Asia Pacific increased by 1.5% and 1.4%, respectively, on an annual basis, reflecting the economic pressures that prevailed in these two regions over the past year.
In the Americas, occupancy costs increased by 2.9% year-over-year, driven largely by U.S. markets, where the declining availability of high quality space is gradually pushing rents higher.
CBRE's Global Prime Office Occupancy Costs survey measures office occupancy costs in 127 markets across the world. The survey is performed semi-annually following the first and third quarter of the year.