Tokyo takes over as world's most expensive office market.
London's West End, is now the world's second most expensive office market, followed by Moscow, Hong Kong's Central Business District or CBD, and Tokyo's Outer Central District in the CBRE report, which tracks office occupancy costs in more than 170 cities around the globe.
Financial centers have been most significantly affected by declining occupier demand and, as expected, registered the most material decreases in office rents.
In many cases, major global office markets have seen occupancy costs fall by 20% or more over the last 12 months. Across the 170 cities as a whole, office occupancy costs fell 2.8% over the 12 month period ending March 31, 2009 (on an un-weighted average basis) compared with an increase of 8% in the 12-month period ending September 30, 2008. Singapore had the largest year over year decrease in occupancy costs with a drop of 34%.
Some markets did record increases in costs over the last 12 months but these markets are very much the exception rather than the rule. Generally, these increases are either due to exceptional local market conditions, and such situations illustrate the uneven way in which the economic downturn is affecting different markets around the globe, according to the CBRE report.
"The great global recession has clearly taken its toll on the world's office markets, particularly those with significant concentrations of financial industry employers," said Dr. Raymond Torto, CBRE's global chief economist. "The most expensive office markets, as measured in dollars, are considerably less expensive than a year ago and occupiers are now in a strong position to procure prime space at attractive costs."
The most expensive office location in the Americas is still New York's Midtown with occupancy costs of $68 psf. However, that market's occupancy costs declined 32%--the second steepest decline in the global survey.
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|Comment:||Tokyo takes over as world's most expensive office market.|
|Publication:||Real Estate Weekly|
|Date:||Jun 17, 2009|
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