Hong Kong is now the most expensive place to take office space, according to the latest figures from Knight Frank.
The agent found the prime office rents in central Hong King stood at £97.11 per sq ft pa in Q4 2011 – a 28% increase on the same period in 2010.
Prime office rental growth in London’s West End – previously the most expensive location in the world – slowed in 2011, after an increase of 31% was recorded in 2010. Prime office rents rose by 9% in H1 2011, to £92.50 per sq ft pa, but remained unchanged in H2 with leasing activity remaining fairly subdued due to wider uncertainty in the UK economy.
Tokyo fell from second to third place in the ranking, and rents in the Japanese capital continue to come under moderate downward pressure as cautious tenants seek to reduce their occupation costs.
The top ten is completed by the major established financial centres of Paris, Singapore, the City of London, Geneva and Sydney, as well as two rapidly emerging office markets, Moscow and Perth.
The biggest mover in the top 50 was Beijing, which rose 29 places to 19th. Prime office rents in the Chinese capital rose by 46% in 2011 to £36.27 per sq ft pa.
Other hotspots for office rental growth in 2011 included San Francisco, where demand from the technology sector helped to push Class A rents up by 24% to £24.42 per sq ft pa, and Manhattan, which saw Class A rents increase by 12% to £41.64 per sq ft pa.
Matthew Colbourne, KF’s senior international research analyst, said: “Office occupiers remain cautious in many international markets, particularly with concerns over the strength of the global economy, and the future of the eurozone, resurfacing in recent months.
“The pace of prime office rental growth in Europe slowed significantly in the second half of 2011, with rents remaining essentially flat in markets such as London (West End) and Frankfurt. Asian cities are experiencing mixed fortunes; while confidence remains high in mainland China, falling office rents were observed in late 2011 in markets dependent on demand from international financial occupiers, such as Hong Kong and Singapore.”
samantha.mcclary@estatesgazette.com
