West End offices most costly
London's West End remains the world's most expensive office market, according to CB Richard Ellis Group's (CBRE) semi-annual global office rents survey. Hong Kong's central business district has risen to second place pushing Tokyo's inner central to third place. Mumbai is now in fourth position on the list while Moscow remains in fifth place in the CBRE rankings, which tracks occupancy costs for prime office space in 176 cities. Office occupancy costs measured in US dollars are affected by changes in the dollar's value versus the respective local currency. Office occupancy costs when converted into US dollars are driven by both the local market dynamics of supply and demand, as well as currency changes. The report also found that on a year-on-year basis, global occupancy costs are searching for a bottom, with the markets monitored revealing a collective drop of 4.6 per cent over the 12-month period ending March.
Asia-Pacific offices in demand
Colliers International said the investment demand for office properties in Asia-Pacific remained strong despite the continued compression of investment yields in the first quarter of this year. Local private investors continued to be one of the key groups of players. In addition, there were initial signs of a return of real estate funds into the market, it said. In China, the highlight was the sale of Gateway Plaza, a prime office building comprising 131,575 square metres in the Lufthansa precinct, to the Mapletree India China Fund for US$425 million. Elsewhere in Australasia, Aviva Investors acquired 80 Clarence Street in Sydney for US$27.86 million. Despite the projection that interest rates might edge up, possibly in the latter part of 2010, Colliers said the market consensus is that the prospective rate increase will be mild.