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Hong Kong Still the World’s Highest-Priced Office Market


Hong Kong is once again the world’s highest-priced office market according to CBRE’s semi-annual Global Prime Office Rents survey. The study also found that markets in the Americas and EMEA showed the most consistent growth in rent.

“Prime rents showed the strongest growth in information technology and media hubs, including Stockholm, Amsterdam, Tel Aviv, New York and Seattle,” said Richard Barkham, global chief economist, CBRE. “Coworking operators have been active in acquiring new space, particularly targeting tenants in tech industries.”

Asia had the three most expensive markets in the world, with Hong Kong holding two of the top three most expensive office markets. Hong Kong’s (Central) overall prime office rent of US$269 per sq. ft. per year was followed by Beijing (Finance Street) (US$174 per sq. ft.), Hong Kong (West Kowloon) (US$164 per sq. ft.), New York (Midtown Manhattan) (US$154 per sq. ft.), Beijing (CBD) (US$152 and London’s West End (US$136 per sq. ft.)

Global prime office rents—which reflect rent, excluding local taxes and service charges for the highest-quality, prime office properties—rose 2.0 percent year-over-year, with the Americas performing the strongest, up 3.4 percent. EMEA was up 1.3 percent and Asia Pacific was up 1.2 percent. CBRE tracks office rents for prime office space in 121 markets around the globe. Of the top 50 most expensive markets, 20 were in Asia Pacific, 18 were in EMEA and 12 were in the Americas.

In North America, New York’s Midtown-South recorded double-digit, year-over-year growth, and Downtown Manhattan and Seattle (Downtown) also placed among the 10 markets with the fastest growing prime office rents.

“In the U.S., economic activity picked up in Q2, benefitted by a weaker dollar and easier financial conditions compared with 2016,” said Barkham. “Corporate earnings have been strong and have propelled global stock markets, which is generally good for prime office rents.”

The Americas

Prime rent growth was strongest in the Americas, with three-fourths of the region’s markets in positive territory. This growth was driven primarily by tightening markets and robust demand—conditions that are expected to continue through 2017. Overall, office rents increased in 18 out of 23 U.S. markets covered in the CBRE survey.

However, the Americas also had the largest proportion of declining markets (21 percent), reflecting continued weakness in oil and gas-oriented markets such as Houston.

São Paulo, Brazil was the most expensive market in Latin America, with prime office rent of US$52 per sq. ft. and ranking as the 40th most expensive market globally. Prime office rents in Buenos Aires declined but São Paulo saw a modest increase.

Europe Middle East & Africa (EMEA)

Six of the 10 fastest-growing global markets were in EMEA, supported by robust economic and employment growth and constrained supply. Stockholm saw the strongest prime office rent growth in EMEA at 18.2 percent, tied with Bangkok for the largest increase among the 121 markets surveyed. Belfast (14.3 percent) and Amsterdam (12.5 percent) also saw strong prime rent growth, driven by demand from the banking and finance & professional services sectors and business services and technology, media & telecommunications industries, respectively.

Only five EMEA markets recorded a year-over-year decline in prime office rents, including London’s West End, where weaker employment growth and slower demand from hedge funds and the private equity sector have reduced demand for new space.

Asia Pacific

Asia Pacific led the list of most expensive prime office rents with seven of the top 10 most expensive markets—Hong Kong (Central), Beijing (Finance Street), Hong Kong (West Kowloon), Beijing (CBD), Tokyo (Marunouchi/Otemachi), Shanghai (Pudong) and New Delhi (Connaught Place - CBD).

Prime rent growth in Asia Pacific averaged 1.2 percent, which was below 2016’s level. Bangkok saw the region’s strongest growth at 18.2 percent, with office demand from a wide variety of businesses. The steep rental rate increase was largely driven by the tight availability of prime office space. Tier 1 cities in China—including Shanghai and Guangzhou—have also seen solid growth, largely driven by demand from domestic occupiers.

The most expensive market in the global ranking from the Pacific Region was Sydney (US$84 per sq. ft.), in 17th place.

Top 10 Most Expensive Markets

(In US$ per sq. ft. per annum)
Rank Market Prime Rent

1 Hong Kong (Central), Hong Kong 269.26
2 Beijing (Finance Street), China 174.07
3 Hong Kong (West Kowloon), Hong Kong 163.57
4 New York (Midtown Manhattan), U.S. 153.50
5 Beijing (CBD), China 151.87
6 London (West End), United Kingdom 136.38
7 Tokyo (Marunouchi/Otemachi), Japan 132.09
8 Shanghai (Pudong), China 120.11
9 New York (Midtown-South Manhattan), U.S. 113.53
10 New Delhi (Connaught Place - CBD), India 110.85

Largest Annual Changes Prime Office Rents
(In local currency and measure)

Top 5 Increases
Rank Market % Change

1 Bangkok, Thailand 18.2
2 Stockholm, Sweden 18.2
3 Belfast, United Kingdom 14.3
4 Amsterdam, Netherlands 12.5
5 Palma de Mallorca, Spain 12.5

Top 5 Decreases
Rank Market % Change

1 Jakarta, Indonesia -19.3
2 Moscow, Russian Federation -16.0
3 London (West End), United Kingdom -12.5
4 Houston (Downtown), U.S. -6.9
5 Geneva, Switzerland -6.8

Top 50 Most Expensive Office Rent Markets (In US$ per sq. ft. per annum)

Rank (Q2 2017) Market Prime Rent
1 Hong Kong (Central), Hong Kong 269.26
2 Beijing (Finance Street), China 174.07
3 Hong Kong (West Kowloon), Hong Kong 163.57
4 New York (Midtown Manhattan), U.S. 153.50
5 Beijing (CBD), China 151.87
6 London (West End), United Kingdom 136.38
7 Tokyo (Marunouchi/Otemachi), Japan 132.09
8 Shanghai (Pudong), China 120.11
9 New York (Midtown-South Manhattan), U.S. 113.53
10 New Delhi (Connaught Place - CBD), India 110.85
11 Shanghai (Puxi), China 97.47
12 Paris, France 92.30
13 London (City), United Kingdom 90.27
14 Dubai, United Arab Emirates 89.85
15 San Francisco (Downtown), U.S. 88.63
16 Mumbai (Bandra Kurla Complex), India 84.10
17 Sydney, Australia 83.39
18 Moscow, Russian Federation 80.36
19 Stockholm, Sweden 79.56
20 Geneva, Switzerland 79.55
21 Shenzhen, China 77.16
22 Boston (Downtown), U.S. 77.01
23 San Francisco (Peninsula), U.S. 76.44
24 New York (Downtown Manhattan), U.S. 75.35
25 Los Angeles (Suburban), U.S. 73.83
26 Seoul (CBD), South Korea 73.16
27 Zurich, Switzerland 72.75
28 Dublin, Ireland 71.32
29 Singapore, Singapore 68.24
30 Mumbai (Nariman Point - CBD), India 64.27
31 Seoul (Yeouido), South Korea 61.86
32 Milan, Italy 61.72
33 Taipei, Taiwan 60.02
34 Washington, D.C. (Downtown), U.S. 59.70
35 Helsinki, Finland 56.52
36 Istanbul, Turkey 56.08
37 Guangzhou, China 55.62
38 Frankfurt, Germany 54.01
39 Oslo, Norway 53.00
40 São Paulo, Brazil 51.80
41 Mexico City, Mexico 49.96
42 Munich, Germany 48.91
43 Brisbane, Australia 48.46
44 Ho Chi Minh City, Vietnam 48.39
45 Tel Aviv, Israel 47.93
46 Seattle (Downtown), U.S. 47.65
47 Perth, Australia 47.04
48 Rome, Italy 46.58
49 Amsterdam, Netherlands 46.15
50 Seattle (Suburban), U.S. 44.89

Source: CBRE Research, Q2 2017.

CBRE’s Global Prime Office Rents survey is performed semi-annually in the first and third quarter of the year.

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