New York remains bargain in the global office market.

Despite rising rents in recent months, New York's Midtown Manhattan remains a bargain versus its global competitors in the office space market, with higher occupancy costs recorded in eight other international cities in this year's edition of Office Space Across the World, a global report on office occupancy costs produced by the real estate services firm Cushman & Wakefield.

Cushman & Wakefield reported that London's West End district retains its title as the world's most expensive office location.

London was followed by Tokyo, Hong Kong, Paris, Mumbai, Dublin, Moscow, Milan, and then New York, which finished ninth in the survey. New York was 7th last year.

New York actually saw its rents increase by 28 percent in US dollar terms last year, as the office vacancy rate dipped below 7 percent for the first time since the summer of 2001, before the attack on the World Trade Center.

Ken McCarthy, managing director of research for the New York Metropolitan Area, Cushman & Wakefield said, "An advantage New York has as a global capital of finance, entertainment, and communications is that its office market is relatively inexpensive compared to other major financial centers."

Office Space Across the World compares office occupancy costs in 211 key locations in 51 countries around the world.

Of those locations, 94 percent recorded positive or stable annual growth and a mere 6 percent experienced a decline in rents.

Elaine Rossall, the report's author and Head of Business Space Research & Consultancy for Cushman & Wakefield in EMEA, says: "We have seen the fastest level of growth in occupancy costs in many of the world's top office locations since the beginning of the century.

The driving force in most markets has been the financial services sector, which is in a buoyant mood given stock-market recovery, record levels of mergers and acquisitions, and more sophisticated global financial markets."

One square metre of office space in London's West End costs an average *2,009 a year for companies to occupy, or US$246 per square foot. This is 35 per cent higher than the occupancy costs in Tokyo, at *1,493 (US $182.88), which this year has overtaken Hong Kong (*1,448, US$177.78) to take second place due to a stronger yen.

Regarding the No. 1 position of London's West End, Guy Taylor, Cushman & Wakefield's head of West End Office Agency, comments: "This prime district of London attracts companies seeking top-quality, showcase-style space that meets the demands of today's occupier--they want the best and will pay the best."

The Indian city of Mumbai is the joint biggest riser in the ranking, together with Dublin. It goes up six places to 5th, with annual occupancy costs at *985 (US $120.15).

The Irish capital of Dublin goes up six places to reach the No 6 position, with occupancy costs at *823( US$100.85) in the prime central districts of Dublin 2 and Dublin 4, both south of the river Liffey.

With office leasing at a record high, rents went up by 43 per cent last year.

James Nugent, director, Office Agency of Lisney, Cushman & Wakefield's Alliance Partner in Ireland, said, "Growth is being pushed by a buoyant economy and increased demand for office space, in particular from the financial services sector, which employs 50 percent more people in the city than it did ten years ago."