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
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 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.
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.