CP is the sixth most costli­est of­fice space

Asia con­tin­ues to dom­i­nate the world’s most ex­pen­sive of­fice lo­ca­tions. Three of the top five mar­kets fall in this re­gion

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At nearly US $160 per sq ft per an­num, Delhi’s Cen­tral Business Dis­trict (CBD) of Con­naught Place has been ranked as the sixth most ex­pen­sive prime of­fice mar­ket in the world, ac­cord­ing to CBRE’s semi­an­nual Global Prime Of­fice Oc­cu­pancy Costs Sur­vey.

Mum­bai’s al­ter­na­tive business dis­trict of Ban­dra–Kurla Com­plex (BKC) re­mained at the 16th place while the CBD Na­ri­man Point oc­cu­pied the 32nd po­si­tion in the Top 50 rank­ings for global prime of­fice prop­er­ties. Lon­don’s West End re­mained the world’s high­est­priced of­fice mar­ket, but Asia con­tin­ued to dom­i­nate the world’s most ex­pen­sive of­fice lo­ca­tions, ac­count­ing for three of the top five mar­kets.

Lon­don West End’s over­all prime oc­cu­pancy costs of US$274 per sq ft per year topped the “most ex­pen­sive” list. Hong Kong Cen­tral fol­lowed with to­tal prime oc­cu­pancy costs of US$251 per sq ft, Bei­jing’s Finance Street (US$198 per sq ft), Bei­jing’s Cen­tral Business Dis­trict (CBD) (US$189 per sq ft) and Moscow (US$165 per sq ft) rounded out the top five.

Com­ment­ing on the find­ings of the sur­vey, An­shu­man Mag­a­zine, chair­man and MD, CBRE South Asia Pvt Ltd said, “Al­though New Delhi’s Con­naught Place moved up two places to the sixth spot on the global top 10 rank­ings over the first quar­ter of 2014, an­nual oc­cu­pancy costs here re­mained sta­ble be­cause of ru­pee ap­pre­ci­a­tion since the first quar­ter. ”

Dur­ing the re­view pe­riod, an­nual of­fice oc­cu­pancy costs in Gur­gaon too re­mained sta­ble; while that of Na­ri­man Point dropped by about 2% and BKC by about 6%. Mean­while, Ban­ga­lore’s Cen­tral Business Dis­trict, which saw a nearly 9% drop, was among the top five global prime of­fice mar­kets to wit­ness a de­crease in yearly oc­cu­pancy costs.

Global prime of­fice oc­cu­pancy costs rose 2.5% year-over-year, led by the Amer­i­cas (up 4.1 per­cent) and Asia Pa­cific (up 2.8 per­cent). Mean­while, the re­gional realty mar­ket of Europe, the Mid­dle East and Africa (EMEA) was es­sen­tially flat, edg­ing up 0.3%year-over-year.

“We ex­pect the grad­ual re­cov­ery of the global econ­omy to con­tinue, lead­ing to bet­ter hir­ing rates and fur­ther re­duc­tion in the avail­abil­ity of space across most mar­kets over the near term,” said Richard Barkham, global chief econ­o­mist, CBRE.

CBRE tracks oc­cu­pancy costs for prime of­fice space in 126 mar­kets around the globe. Of the top 50 “most ex­pen­sive” mar­kets, 20 were in EMEA, 20 were in Asia Pa­cific and 10 were in the Amer­i­cas.

Europe, Mid­dle East and Africa

The Eu­ro­zone’s tepid eco­nomic re­cov­ery has held back oc­cu­pier ac­tiv­ity, re­sult­ing in static prime oc­cu­pancy costs in most core Euro­pean mar­kets. The main de­creases have been in cen­tral Euro­pean mar­kets, such as Warsaw (down 1.6%), where the economies are rel­a­tively healthy but new sup­ply has driven down rents.

In ad­di­tion to Lon­don West End, other mar­kets from the re­gion on the global top 10 list were Moscow (US$165 per sq ft) and Lon­don City (US$153 per sq ft).

Asia Pa­cific

Asia Pa­cific had 20 mar­kets ranked in the top 50 most ex­pen­sive, in­clud­ing seven of the top 10 — Hong Kong ( Cen­tral), Bei­jing (Finance Street), Bei­jing (CBD), New Delhi (Con­naught Place - CBD), Hong Kong (West Kowloon), Tokyo (Marunouchi Otemachi) and Shang­hai (Pudong). The most ex­pen­sive mar­ket in the global rank­ing from the Pa­cific Re­gion in­ci­den­tally was Syd­ney (US$99 per sq ft), that oc­cu­pied the 19th place.

Amer­i­cas

In the US, where the eco­nomic re­cov­ery has firmly taken hold, strong leas­ing ac­tiv­ity led to the high­est level of quar­terly net ab­sorp­tion since 2007, driving above-in­fla­tion in­creases in prime oc­cu­pancy costs across all but one ma­jor US mar­ket. Ad­di­tion­ally, in­creas­ingly broad-based ris­ing hir­ing rates have boosted de­mand for of­fice space in most places.

Eight North Amer­i­can mar­kets recorded dou­ble-digit in­creases in prime oc­cu­pancy costs in Q3 2014, and the top six growth mar­kets in the Amer­i­cas were all U.S. cities.

New York Mid­town, the 11th most ex­pen­sive mar­ket in the world, re­mained the most ex­pen­sive mar­ket in Amer­ica, with a prime of­fice oc­cu­pancy cost of US$121 per sq. ft.

Rio de Janeiro re­mained the most ex­pen­sive mar­ket in Latin Amer­ica, post­ing an of­fice oc­cu­pancy cost of US$101 per sq ft and rank­ing as the 18th most ex­pen­sive mar­ket glob­ally.

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