Office rental

Hong Kong’s Central and West Kowloon the second- and fifth-most-expensive office locations in the world, says CBRE

International Commerce Centre overtook New Delhi’s Connaught Place

PUBLISHED : Monday, 21 December, 2015, 3:24pm
UPDATED : Monday, 21 December, 2015, 3:26pm

Hong Kong’s Central and West Kowloon are the second- and fifth-most-expensive office locations in the world, according to CBRE Research’s semi-annual Global Prime Office Occupancy Costs survey.

The prime occupancy costs – which reflect rent, plus local taxes and service charges – in London’s Central West End topped the list at US$273 per square foot per year as of the third quarter, about 1.2 per cent higher than Hong Kong Central’s US$269.31 per square foot.

But West Kowloon leapt one position to the fifth, from sixth in the first quarter, with prime occupancy cost stood at US$162.04 per sq ft per year, up 7.83 per cent from first quarter.

A CBRE spokeswoman said it picked Central’s One International Finance Centre, Two International Finance Centre and Cheung Kong Center, which had the highest rents, and International Commerce Centre (ICC) in West Kowloon as the samples in the survey.

ICC overtook New Delhi’s Connaught Place - where annual cost US$151.27 per sq ft per year - as the fifth most expensive office locations in the world.

Beijing’s Finance Street and Beijing’s core business district remained the third- and fourth-most-expensive office locations.

Henry Chin, head of research at CBRE Asia-Pacific, said: “the TMT (technology, media and telecommunications) sector continues to drive office leasing demand in the Asia-Pacific, with healthy appetite for prime quality space.”

He said financial services companies would remain the main drivers of leasing activity, although demand was likely to moderate after several years of strong growth.

“Cost saving remains at the top of the occupier agenda with renewals being one of the main themes,” Chin said.

CBRE tracks occupancy costs for prime office space in 126 markets around the globe. Twenty of the 50 “most expensive” markets were in the Asia-Pacific region.

Prime occupancy costs increased at a 2.4 per cent annual pace globally, as the world economy continued to gradually improve and the service sector, a key bellwether for prime office space, entered its fourth year of expansion.