The West End office market experienced one of the world’s biggest falls in prime rent over the past year, according to CBRE’s Global Prime Office Rents survey.
Though the London submarket was the sixth most expensive area in the report, its 12.5% fall – driven by weaker employment growth and slower demand from the private equity sector – was eclipsed only by Moscow, Russia (-16%) and Jakarta, Indonesia (-19.3%).
Hong Kong remained the highest-priced office market in the world, with prime rents of $269.26 per sq ft.
It was reflective of Asia’s dominance in the survey – seven of the 10 most expensive markets were in the region.
However, six of the 10 fastest growing markets were in Europe, led by Stockholm’s 18.2% rise in prime rents.
Only five EMEA markets recorded falls, two of those being London’s West End and City.
Leeds topped the list for growth in the UK, with its prime rents bolstered by limited Grade A supply and 6 Queen Street setting new rent records. However, CBRE said it expects rents to plateau for at least the next year.
The American market seemed to be the most divided.
Overall growth, at 3.4%, was the fastest in the survey. Three-quarters of the region’s markets were in positive territory thanks to high demand, which is expected to continue throughout the rest of the year.
However, it also had the highest proportion of falling markets, led by Houston, which has been hit by bankruptcies, vacancies and layoffs in the oil and gas industries.
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