London's West End remained the world's most expensive office market, according to CBRE Research's semi-annual Global Prime Office Occupancy Costs report, but Asia dominated the world's most expensive office locations, accounting for four of the top five markets. in qatar
The study also discovered that Ireland's real estate recovery is on track, with Dublin (26.1%) and Belfast (13.3%) seeing the highest and fourth-largest year-over-year prime occupancy cost increases, respectively, among the 127 cities surveyed. Real estate fundamentals in North America remained high, with Seattle (Downtown), San Francisco (Peninsula), and Vancouver (Suburban) among the top ten markets for prime occupancy cost growth.
The "most expensive" list was topped by London West End's average prime occupancy costs of US$267 per sq. ft. per year. With overall prime occupancy costs of US$254 per sq. ft., Hong Kong (Central) came in second, followed by Beijing (Finance Street) (US$196 per sq. ft.), Beijing (Central Business District (CBD) (US$188 per sq. ft.), and New Delhi (Connaught Place - CBD) (US$157 per sq. ft.).
The incremental recovery of the global economy was reflected in the change in prime office occupancy costs. "Occupier caution has faded and corporate optimism has been on the increase, and this confidence is starting to translate into a degree of expansionary momentum," said Richard Barkham, CBRE's Global Chief Economist. "At the same time, many office markets are running out of quality, new, scalable, or CBD-located office buildings, which businesses need to implement workplace strategies that will drive efficiency and attract or retain talent."
CBRE monitors prime office space occupancy costs in 127 markets around the world. Nineteen of the top fifty "expensive" markets were in EMEA, twenty in Asia Pacific, and eleven in the Americas.
Africa, the Middle East, and Europe (EMEA)
The continued recovery has sparked a resurgence in leasing activity in UK metropolitan cities and smaller Central and Eastern European markets outside of London and Dublin. The exceptions have been Russian office markets, which have experienced a deep recession as a result of Western sanctions and a sharp drop in oil prices, and Warsaw, where supply levels continue to put downward pressure on rents. Occupiers in EMEA are beginning to move away from cost optimization and room reduction and toward expansions. Just 11 out of 57 EMEA markets saw a year-over-year decrease in prime office occupancy rates, which rose by 1.5 percent.
In addition to London West End, London City (US$143 per sq. ft.) and Moscow (US$128 per sq. ft.) are among the top ten markets in the world.
Asia and the Pacific
Six of the top ten most expensive markets in Asia Pacific were Hong Kong (Central), Beijing (Finance Street), Beijing (CBD), New Delhi (Connaught Place - CBD), Hong Kong (West Kowloon), and Tokyo (Marunouchi Otemachi).
Regional surveys revealed stronger hiring intentions among employers in India, Taiwan, New Zealand, the Philippines, and Japan, while corporate hiring activity remained subdued in other locations. Growing IT back office services seeking operational and cost productivity continued to benefit India and the Philippines.
Apart from London's West End, Hong Kong (Central) remained the only market in the world with a prime occupancy cost above US$200 per sq. ft.
Sydney (US$88 per sq. ft.) was the most expensive market in the Pacific Region, ranking 24th overall.
The Americas are a continent that spans the globe.
Despite structural changes, the general economic recovery in the United States has boosted demand for office space in most metros, with the reduction of space per worker being the most important. Overall, occupier activity has maintained its momentum from last year, resulting in a rise in occupancy costs in 19 of the 22 U.S. markets studied. The drop in oil prices has affected Canada, causing GDP forecasts for 2015 to be revised downward. The majority of Latin American economies have tended to underperform their peers, resulting in poor labor market activity.
In the first quarter of 2015, four American markets saw double-digit rises in prime occupancy costs.
With a prime office occupancy rate of US$127 per sq. ft., New York Midtown, the world's 10th most expensive market, remained the most expensive market in the Americas.
Rio de Janeiro remained the most expensive market in Latin America, with an office occupancy rate of US$76 per square foot and a global ranking of 31st.