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Hong Kong world's most expensive office market; London-West End follows; Tokyo third

Press Release   •  Jul 16, 2012 12:57 BST

- Six of the Ten ‘Most Expensive’ Office Markets in Asia-Pacific

- Three EMEA Markets Make Top Ten -

 - Occupancy Costs Increase 3.6% Worldwide From Year Ago - 

 Asia-Pacific holds increasing sway in the global commercial real estate market, as Hong Kong’s central business district (CBD) was found to be the world’s most expensive office market with the region also accounting for six of the top 10 most expensive occupier markets worldwide, according to CBRE’s Prime Office Occupancy Costs survey.

Through the survey, CBRE tracks occupancy costs for prime office space in 133 markets around the globe. Of the top 50 ‘most expensive’ markets 19 are in Asia-Pacific, 19 are in EMEA and 12 in the Americas.

Hong Kong’s CBD led the “most expensive” list with overall annual occupancy costs of US$248.83 per sq ft (psf). This topped London’s West End, which, reported average occupancy costs of US$220.15 psf. Tokyo was the third most expensive market, followed by Beijing’s Jianguomen (CBD) and Moscow.        

“The most expensive office markets are increasingly located in dynamic business centres across emerging economies as office occupiers diversify their global footprints in these markets to take advantage of rising incomes and the availability of labour,” said Dr. Raymond Torto, CBRE’s Global Chief Economist. ”The most expensive office occupier markets also have a diversified economic base; limited, available institutional quality space; strong currencies and are increasingly located in urban centres.”

Occupancy costs increased by an average 3.6% worldwide led by Asia-Pacific at 7.8%, Americas at 5.0%, and EMEA at 0.4%. Occupancy costs increased in 80 markets, decreased in 24, with no change in 29. Among the markets exhibiting the most significant gains were the Beijing Jianguomen (CBD) along with Beijing’s Finance Street and Guangzhou, China. Beijing’s rise was driven by strong demand, particularly from domestic financial institutions, combined with lack of available space in Finance Street. Moscow was the only market in EMEA to make the top ten risers, with an annual increase in occupancy costs of 19.1%, this was primarily driven by strong tenant demand n the CBD area where vacancy is relatively low and new development very limited.

 In addition to London’s West End ranking as the world’s second-most expensive market, other markets in the region that top the list are Moscow (5th –annual occupancy cost of US$171.53 per sq. ft.), London’s City market (10th – US$131.51 psf), Paris (14th - US$123.82 psf), and Geneva (19th - US$99.18 psf).

 Peter Damesick, EMEA Chief Economist, CBRE, added:

“Despite the economic headwinds being experienced, twice as many office markets in EMEA recorded increases in office occupancy costs than saw declines over the past year. However, most the increases that did occur in European markets were fairly modest, and the impact of the Eurozone crisis on occupier demand was evident in a further reduction in occupancy costs in several markets in the European periphery, notably Italy, Spain and Greece.  From the international occupier’s perspective, cost reductions in these EMEA markets will enhance their competitiveness as office locations.”

 While comparisons in dollars are affected by currency exchange rates, annual percent change calculations are based upon occupancy costs in local currency and measurement and not influenced by currency changes. Due to methodology changes in this report, comparisons with figures in previously released reports are not valid.

 Regional Ranking Detail

 Europe Middle East & Africa (EMEA)

In addition to London’s West End ranking as the world’s second-most expensive market, other markets in the region that top the list are Moscow (occupancy cost of US$171.53 per sq. ft.), Paris (US$123.82 per sq. ft.), and Geneva (US$99.18 per sq. ft.).

 Moscow posted the largest gain for the region as its occupier costs grew by 19.1%, driven by strong tenant demand particularly focused on the CBD area where vacancy is relatively low and new development is very limited. Moscow was followed by Johannesburg, South Africa (14.3%). Overall, despite economic headwinds, 12 markets in EMEA experienced declines, while 26 markets saw occupancy costs for the year rise.

 Asia Pacific

Asia Pacific had 19 markets ranked in the top 50 most expensive, with three of the top five—Hong Kong-CBD, Tokyo and Beijing’s Jianguomen (CBD)—most expensive markets. According to a CBRE survey of Global Office Occupier Footprints, Hong Kong is the number one location for global office occupiers and this, coupled with scarce land for development, has led to high office rents. The most expensive market in the global ranking from the Pacific Region was Sydney (US$117.88 per sq. ft.), which came in at 15th, on the strength of an 18.9% increase in local currency.

 Despite its most-expensive ranking, Hong Kong experienced the largest annual decrease of all 133 markets tracked (-17.2%) as margin pressures on global financial services firms have impacted its Central submarket in the last year given its high exposure to such firms. Some of these firms have consolidated space requirements leading to increased availability in the core CBD.


North America is led by Midtown New York, which posted an office occupancy cost of US$114.30 per sq. ft., on the heels of a 5.9% year-over-year increase. The New York Midtown market was ranked 18th globally.

 San Francisco (Downtown) experienced the largest year-over-year increase, at 34%, with San Francisco (Peninsula) right behind it, at 32.7%, with demand spurred by the technology sector. Overall, 32 markets in the Americas saw occupancy costs for the year rise, while only six experienced declines.

 In Latin America, São Paulo remains the most expensive market, posting an office occupancy cost of US$144.75 per sq. ft., and ranks as the 8th most expensive market globally. Meanwhile, with an occupancy cost of $128.02 per sq. ft., Rio de Janeiro is also in the top 15.

Notes to Editors

  1. The Prime Office Occupancy Costs report is a survey of office occupation costs for prime office space in 133 cities worldwide.
  2. The latest survey provides data on office rents and occupancy costs as of March 31, 2012.
  3. The Largest Annual Changes rankings are based upon occupancy costs in local currency and measure. The Most Expensive ranking is based upon occupancy costs in US$ per sq. ft. per annum.
  4. The figures given in this release refer to occupancy cost. This represents rent, plus local taxes and service charges. The occupation cost figures have also been adjusted to reflect different measurement practices from market to market.
  5. Due to methodology changes comparisons with figures in previously released reports are not valid.
  6. To obtain a full copy of the report or to arrange to speak with a CBRE expert, please contact Robert McGrath at 212.984.8267 or


About CBRE Group, Inc.

CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services firm (in terms of 2011 revenue). The Company has approximately 34,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at

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