Tokyo, with office rents standing at £87.54 per sq ft, comes out as the clear leader in Richard Ellis’ latest survey of world office rents.
When service charges and other costs are taken into account the total annual charge for a square foot of prime Tokyo office space is £93.34.
Rents in the City of London, at £52 per sq ft, seem almost modest, but when the extras are added the gap narrows. With service charges at 10% and rates at 35%, the total cost in the City is £75.15 per sq ft.
The West End of London ranks third in the world league table, at £35 rent and £49.20 total occupation cost, and Midtown New York now ranks fourth, with rents of £26.95 and total office costs of £37.42 per sq ft.
The cheapest of the locations in the Richard Ellis study is Jakarta, where rents are a mere £5 per sq ft. However, it has the surprising distinction of having the highest services charges recorded — a swingeing 53% of rent — giving a total occupancy cost of £7.67 per sq ft.
Levels of service charges vary enormously around the world, when looked at as a percentage of rent. Tokyo and Hong Kong are the cheapest, at 7% and 8% respectively, and London comes in at the low end of the scale at 10% in the City and 14% in the West End.
In contrast, Glasgow at 33% and Manchester at 31% come in at the upper end of the range.
But the real horror story for UK office users is the punitive level of property taxes. Glasgow leads the world in this field, with rates running at no less than 73% of rent. This leaves second-placed Manchester looking almost reasonable at 51%.
Leaving aside Tokyo, which apparently manages without taxes altogether, the best deals are in Frankfurt and Amsterdam at 1%, Hong Kong and Sao Paulo each at 3% and Paris at 4%.
