With its high-rise buildings, fantastic facilities and breath-taking views, it is unsurprising that office space to rent in Central London was once considered the world’s most expensive. However, the economic climate has not been kind to the London office space market and has ultimately resulted in a decline in growth last year after a 31% increase in 2010.
At the other end of the scale sees office space in Hong Kong which appears to have overtaken London and now hold the status of supplying the most expensive office space in the world. Recent research from Knight Frank reveals that much of their prime location office space last year was being rented for around HK$1,046 per square meter each month – an increase of 28%.
Senior Analyst at Knight Frank, Matthew Colbourne, says Hong Kong “always seems to react first to volatility in the financial markets”, owing to the fact that many of its tenants are in the global finance sector.
However, in spite of the increase Hong Kong witnessed last year, Knight Frank has made predictions that because demand for office space to rent is less, rents will decrease over the coming year. Colbourne attributes this to “general nervousness about the world economy right now. Hong Kong was the first market to show recovery in 2009, and it’s the first now to show that it’s coming down.”
Not all of China follows the same pattern, however, as “in Hong Kong, though rents seem to be declining, mainland China is still on an upward trend”, according to Colbourne. After a 46% increase in rental prices in 2011 for office space to rent in Beijing, which placed them number 19 on the list of the world’s most expensive offices, further increases have been predicted for this year by Knight Frank for both Beijing and Shanghai. Colbourne also states that vacancy has gone below 5% which places more importance on rental prices.
The US has also seen an increase in rental prices; San Francisco office space saw an increase of 24% last year as a result of more demand from companies in the technology sector, as well as Manhattan office space which has noted an increase of 12%.
Office space to rent in Mumbai and New Delhi have also seen an increase in rental prices, placing them 14th and 20th respectively in the list of the world’s most expensive cities to rent office space in.