Prime Hong Kong office rents fell 24pc in 2012: Cushman & Wakefield
Cost of renting offices rises 9.6 per cent in West End but drops 24.6 per cent in HK
London's West End has assumed Hong Kong's mantle as the world's most expensive place to lease an office, after rents in Central fell sharply last year as a result of the global economic downturn, which put a stop to the expansion plans of many financial institutions.
A study by Cushman & Wakefield found that the average annual occupancy cost for a grade A office space in Hong Kong - which includes rent, management fees and property tax - dropped 24.6 per cent year on year to US$184 per square foot per year, making it the second-most expensive in the world.
"In the last 12 months, we saw office demand in Central experience a slowdown, resulting in a sizeable rental decline," said John Siu, an executive director of Cushman & Wakefield. "Demand fell because of the restructuring among banking and financial institutions, which led to office space reduction."
Siu said office rents would continue coming under downward pressure this year because of "slightly elevated availability".
Excluding management fees and taxes, the average office rent in Central was HK$98 per square foot per month in the last quarter of last year, and will drop a further 10 per cent to HK$88 per square foot this year.