The Trends: London’s West End Tops Priciest Markets
- Dec 09, 2008
London’s West End remains the world’s most expensive office market with occupancy costs totaling $248.66 per square foot per year, according to CB Richard Ellis Inc.’s semiannual “Global MarketView/Office Occupancy Costs” survey. The report is based on occupancy costs, defined as rent plus local taxes and service charges, for the 12 months ending Sept. 30.The remaining top 10 cost-heavy office markets are Moscow ($234.73), Hong Kong’s central business district ($231.59), Tokyo’s Inner Central ($184.26), Mumbai’s CBD ($170.85), Dubai ($156.53), Tokyo’s Outer Central ($151.69), London’s City ($146.61), Singapore ($135.13) and Hong Kong’s Prime Districts ($132.97).No North American markets cracked the top 10, but five made the top 50 list: New York City’s Midtown (No. 15 with $98.08), Calgary’s CBD (No. 38 with $66.58), suburban Los Angeles (No. 41 with $63.58), Toronto’s CBD with (No. 43 with $61.54) and Downtown New York City (No. 48 with $59.16). Brazilian market Sao Paulo came in at No. 26 with $75.13, and Rio de Janeiro was recorded at No. 37 with $68.77.“Our current perceptions are greatly affected by the current economic malaise, and we tend to forget how fast rents and occupancy costs were rising over the last 12 months,” noted CB Richard Ellis global chief economist Raymond Torto in a statement. “Clearly the rate of change is generally slowing, and in some markets the pricing direction is down. The turn in rent trajectory will provide some relief to occupiers and angst to owners. However, unlike previous downturns, which have occurred simultaneously with extensive overbuilding, the real estate market globally today is in a stronger position to weather the difficulties than in the past.”The top 10 markets with fastest-growing occupancies, ranked by the 12-month percent change increases in local currency and measure, are Abu Dhabi (94.6 percent change); Ho Chi Minh City, Vietnam (51.4 percent); Dubai (50.9 percent); Perth, Australia (45.2 percent); Tel Aviv (40.7 percent), Durban, South Africa (36.8 percent); Sao Paulo (34 percent); Panama City (30.9 percent); Cape Town’s Claremont (30 percent); and Moscow (29.8 percent).