New York office rents catch up to Hong Kong – but Asian city remains world’s most expensive place to set up shop
- Analysts say rents in Central, the world’s most expensive office district, could fall next year if the US-China trade war persists
- Office occupancy costs in Central stood at US$338 per sq ft versus US$212 per sq ft at Midtown in New York
New York is rapidly closing the gap on prime office rents with Hong Kong and analysts say it could fall next year if the trade war persists, even as the special administrative region remained the world’s most expensive city to set up shop for the fourth consecutive year.
The gap between occupancy costs – rent, tax and service charge – in Central and New York’s Midtown narrowed by 6 percentage points in the 12 months to September 2018, according to a JLL report tracking prime office rents in 61 cities in the third quarter, which was released on Tuesday.
Central’s annual rent growth of 4.6 per cent also fell short of Midtown’s 9.3 per cent.
Hong Kong suffers 25 per cent drop in commercial property market
“Solid economic growth in the US continues to provide support for the New York office market, with vacancy rates in Midtown reaching a 10-year low,” said Denis Ma, head of research at JLL.