Workers pass the Shard on the opposite bank of the River Thames in the City of London. Photo by Luke MacGregor, Reuters
MANILA, Philippines - Asian markets accounted for seven of the 10 most expensive office markets worldwide, according to a study by commercial real estate services firm CBRE.
In CBRE's study "Cost Increases Signal Economic Momentum", London's West End remained the most expensive prime office market in the world. Prime office space in the West End costs US$273.63 per square feet a year.
CBRE attributed "development restrictions in core areas, coupled with strong tenant demand and limited availability" as the reason why occupancy costs continued to rise in London.
In second place is Hong Kong's Central, with rates of $250.61 per square feet per year.
London's West End and Hong Kong's Central are the only two markets in the world with costs above $200.
"In a market where occupiers remained cost-conscious, Central was the exception, continuing to attract tenants while the rest of the territory’s office markets remained sluggish. Mainland Chinese securities and wealth management firms were the main driver of demand in Central and Fringe Core areas," CBRE said.
The third and fourth most expensive markets globally are in Beijing -- Finance Street and the Central Business District.
Prime office space Beijing's Finance Street commands $197.75 per square feet per year, with demand driven by domestic finance companies. Across town, office space in Beijing's central business district goes for $189.39 per square feet per year.
In fifth place is Moscow, Russia, where office space rents go for $165.05 per square feet per year.
Sixth is New Delhi's Connaught Place central business distrcict, where prime office space commands $158.47 per square feet per annum.
In seventh place is another area in Hong Kong, this time West Kowloon, with rents at $153.65 per square feet per year.
The City of London is the 8th most expensive market in the world with rents at $152.67 per square feet per annum.
The ninth most expensive market in the world isTokyo's Marunouchi Otemachi with rents at $136.46 per square meter per year.
In 10th place is another Chinese city - Shanghai's Pudong district with rents at $127.89 per square meter per year.
There were no U.S. cities in the top 10, although New York's Midtown Manhattan came in at 11th with rents at $120.65 and San Francisco's downtown with rents at $114.
CBRE noted Paris dropped out of the top 10 most expensive list, falling to 13th place.
CBRE said it sees occupancy costs continuing to rise.
"We expect the gradual recovery of the global economy to continue, leading to higher hiring rates and further reduction in availability of space across most markets over the near term. In this environment, we expect occupancy costs to continue rising from current levels, further limiting options for occupiers. Technology, quality and flexibility are expected to increasingly come into consideration in space use and location decisions, as occupiers will seek to contain costs and improve productivity," it added.