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Keeping pace with soaring office occupancy costs; OFFICE SECTOR.

Vigorous demand is fuelling significant increases in worldwide office occupancy costs, according to property firm DTZ.

Its unique annual Global Office Occupancy Costs Survey focuses on 137 business districts in 49 countries and measures occupancy costs per employee.

Occupancy costs take account of rent, running costs, property taxes, fitting-out costs and leasing incentives.

Net usable area comprises the occupier's functional space and excludes areas such as lift lobbies.

London takes two of the top three rankings, with Birmingham rated higher than Manchester, Bristol and Liverpool.

Birmingham-based Geoff Thomas, DTZ's regional chairman, expained: "It is a reflection of how Birmingham is rated as a world-class business centre that it lies so high up the league table, particularly as nearly all those which command higher rents are capital cities."

In the UK, London's West End topped the global league table with the highest occupancy cost of EUR31,160 per workstation per year, with the City at third position at EUR20,690. Hong Kong is at second place with EUR27,530.

Across the regions, Birmingham is ranked 38th out of 137, with a total occupancy cost per workstation per year of EUR10,230, an increase of 10.6 per cent on 2007 and ahead of Manchester and Bristol at joint 44th position at EUR9,770, Glasgow 49th at EUR9,540 and new entrant Liverpool in 63rd place at EUR8,270. Manchester is the only UK city to experience a reduction in costs of 2.2 per cent due to over-supply.

Mr Thomas added: "From Birmingham's perspective, the city is seen as a cost-effective alternative to London, not just on occupancy costs, but also due to the fact that salaries are approximately two-thirds those of the capital.

"The availability of skilled staff in Birmingham is a major draw for potential occupiers, as is our geography - the city is just an hour-and-a-half from London and no more than two hours from any major conurbation in the country."

Despite differing growth patterns, Western Europe is the most expensive region globally at EUR11,650 per workstation per year, with a premium of 39 per cent over North America, the next most expensive region, at EUR8,360 per workstation per year.
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Title Annotation:Features
Publication:The Birmingham Post (England)
Geographic Code:4EUUK
Date:Mar 20, 2008
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