London is Still the Most Expensive Office Market in the World
By Will Clarke
The most expensive office space in the world is located in London's West End where occupancy costs were a staggering 121 GBP ($182.94 USD). Despite the global economic downturn, prices remain high in a number of international cities with Asia and Latin America holding some of the most expensive space.
London was followed by central Hong Kong, inner Tokyo, Mumbai and Mosow as markets in the Eastern Hemisphere made up four of the top five spots. Midtown Manhattan, the most expensive market in the United States placed a distant 26th as rents have fallen 34 percent since their peak in 2007.
Rio de Janeiro and Sao Paolo saw occupancy costs soar nearly 20 percent as the country continues to develop. As a result, Sao Paolo became the 10th most expensive office market in the world with costs of $100 per square foot.
Prices remain high despite staggering job losses in industries that are typical office space anchors. Worldwide nearly 350,000 jobs have been lost in the banking and insurance industries which tend to use Class A space for their corporate operations.
As a result of more space coming on line, year-over-year occupancy costs have fallen nearly five percent. Since the commercial real estate market lags compared to the economy, many analysts predict global office space costs will fall in the foreseeable future. The cities with the biggest declines in occupancy costs were Singapore, Ho Chi Minh City and Perth which all saw year-over-year declines of more than 25 percent.
Overall, of the 176 global markets that were evaluated, 116 saw declines in occupancy costs.