HK is the most expensive city for offices

EDINBURGH: London lost its ranking as the world’s most expensive city for offices in 2008, supplanted by Hong Kong and Tokyo for the first time in nine years.

Falling rents in the UK capital, combined with the pound weakening against the euro brought occupancy costs for prime offices in London’s West End down 23 per cent to ?1,403 (?1 = RM4.70) per sq m annually, New York-based property broker Cushman & Wakefield Inc said in a report yesterday.

That compares with ?1,743 per sq m in Hong Kong and ?1,649 in Tokyo.The global financial crisis pushed rents lower in 16 per cent of the world’s biggest cities as financial companies fired workers and cut back on the space they lease, Cushman said. Worldwide mortgage-related losses and asset write downs total more than US$1.1 trillion (US$1 = RM3.67).

London “has now felt the full impact of the credit and banking crisis,” Cushman said.
Costs fell 4 per cent in Hong Kong compared with a year earlier and declined 19 per cent in Tokyo.

“There seems little doubt that rents will continue to fall over 2009, perhaps at a faster rate than before,” said John Siu, general manager, Cushman & Wakefield Hong Kong.

Cushman & Wakefield surveyed 202 locations in 57 countries. Rents climbed 3 per cent globally, the smallest increase since 2004, the broker said. Rent accounts for the bulk of occupancy costs, which also include service charges and property taxes.

Moscow, Dubai, Mumbai, Paris, Damascus, Singapore and midtown Manhattan rounded out the 10 most expensive locations for offices.

Dublin fell to 15th, ranking it out of the top 10 for the first time in three years.

By Bloomberg