New York is 7th most expensive city.

London has overtaken Tokyo as the world's most expensive city for office space, according to "Business Space Across the World," the annual report by Cushman & Wakefield. Occupiers of prime office space in the British capital can expect to pay average total occupancy costs (rent, plus property taxes and service charge) of $135 (U.S.) per SF - which is double Europe's next most costly location, Paris, which is in 5th position. Meanwhile, Hong Kong has climbed one place to third position, San Francisco has moved up from 11th to 4th place -- one of the biggest moves.

Other cities that have made significant leaps in this year's table include: New York City (from 13th to this year's 7th), Stockholm (15th to 8th) Singapore (20th to 14th), Madrid (23rd to 17th) and Beijing (32nd to 26th). Those that have slipped include: Mumbai (from 3rd to this year's 9th), Seoul (5th to 23rd), Beirut (22nd to 3.0th) and Prague (31st to 39th).

Maria Sicola, senior managing director of research and analysis for Cushman & Wakefield, said: "Office markets around the world have benefited from a relative healthy global economy, with prime office rents rising by an average of 10 percent annually in the cities that we have analyzed. Although the froth has come off the market, real estate fundamentals are still sound," she said. Other main findings for the world's top office locations:

Europe

* Western Europe has some of the lowest office vacancy rates in the world, with the average at 3.75%, and some, including Luxembourg City and Munich, below 1%.

* Rents fell by an average of 5.6% in Central and Eastern Europe, despite a rebound in the region's economies last year. Moscow remains the most expensive location in Central and Eastern Europe, at $46 per SF, followed by Bucharest.

Americas

* Regarding the U.S. market, the report says: "All indications point to the office market being insulated against the impact of a short term economic downturn, particularly at the prime end of the market."

* The strongest markets in the US are in the '24-hour cites'; the prime vacancy rate has fallen to 2% in San Francisco, 2.2% in Boston, 3.2% in Downtown New York and 4% in Midtown. These historically low vacancy rates have helped to push up rental levels.

* In Canada, Vancouver is now the most expensive location, just above Toronto, in terms of rental levels, although Toronto is still top for total office occupancy costs.

* In Mexico City, the level of vacant space fell by more than half. Vacancy rates also fell in Sao Paolo, Rio de Janeiro and Santiago de Chile, but rose in Buenos Aires, the most expensive city in Latin America for office costs.

Asia

* Vacancy rates fell across the region, in particular in Hong Kong and Beijing. This has helped to drive up rents. The only market where the vacancy rate increased was Auckland, New Zealand.

Findings for the world's top distribution and warehousing locations include:

* The U.S. was the fastest growing market with annual rental growth at 49%. This was-largely because of the huge rise in the San Francisco Peninsula (215% increase).

* In Europe, the Swedish city of Goteburg saw the biggest annual rental increases year on year, with a 33.33% increase, followed by Malmo with a 27.27% increase. Zurich, Luxembourg City, Den Haag in The Netherlands and Barcelona all recorded a 25% increase in rents.

* The report highlights the increasing demand for industrial and distribution space due to an increasingly international market, the need for cost efficiency and the roll-out of new technology. New user groups, such as telecommunications, have also been particularly active.

                         (US$ per SF per annum)
2001  2000  City           Occupancy
                             Costs
1      2    London           $135
2      1    Tokyo            134
3      4    Hong Kong        107
4      11   San Francisco    80
5      6    Paris            72
6      8    Zurich           71
7      13   New York City    67
8      15   Stockholm        67
9      3    Mumbai           66
10     12   Boston           57
11     7    Moscow           55
12     9    Frankfurt        55
13     14   Athens           50
14     20   Singapore        48
15     18   Dublin           47
16     --   Buenos Aires     45
17     23   Madrid           45
18     --   Taipei           43
19     21   Sao Paolo        43
20     16   Warsaw           42
21     19   Washington DC    41
22     --   Tel Aviv         39
23     5    Seoul            38
24     25   Sydney           38
25     --   Luxembourg       37
26=    32   Beijing          37
26=    29   Milan            37
28     24   Kuwait City      37
29     26   Berlin           36
30     22   Beirut           35
31     41   Istanbul         33
32     27   Amsterdam        32
33     --   Mexico City      28
34=    33   Toronto          28
34=    30   Oslo             28
36     38   Vienna           26
37     36   Lisbon           26
38     35   Brussels         26
39     31   Prague           25
40     40   Helsinki         25
41     42   Copenhagen       22
42     43   Santiago         21
43     --   Montreal         19
44     --   Abu Dhabi        19
45     44   Bratislava       19
46     --   Auckland         16
47     45   Johannesburg     14
48     --   Bucharest        13
49     48   Bangkok          10