We’ve been tracking the most expensive office markets around the world for some time and the top city has varied in recent years – a sign of the uneven global economic recovery.
CB Richard Ellis (CBRE) just released its global list and not one U.S. market cracked the top 10. In the U.S., Midtown Manhattan boasts the most expensive offices. At approximately $114.00 per square foot, New York seems like a bargain and ranked 18thout of the top 20 markets. Central Hong Kong has New York beat with the most expensive commercial real estate market in the world. Offices cost roughly $250.00 a square foot. The list indicates the office recovery is gaining momentum in Asia with six of the top 10 most expensive cities located in the region.
“The most expensive office locales are increasingly located in dynamic markets across the emerging economies as office occupiers diversify their global footprints in these markets to take advantage of rising incomes and the availability of labor,” said Raymond Torto, CBRE’s global chief economist. “The most expensive office occupier markets also have a diversified economic base; limited, available institutional quality space; strong currencies and are increasingly located in urban centers.”
So what is the takeaway from this data? Businesses looking to have a presence in any of these business capitals will have to pay a premium for space and most likely lock-in to agreements that won’t meet their needs in the future. The increase in occupancy and rising rents should signal businesses to pursue alternative workplaces who are already in market and offer the space and terms that allow companies to scale up or down as needed.