London & Mumbai top list of world's most expensive office markets
London’s West End, Mumbai, the City of London and Moscow are the top four most expensive office markets in the world, according to CB Richard Ellis Research’s semi-annual Global Market Rents survey. The report tracks the world’s most expensive markets as well as markets with the fastest growing rents over the past 12 months.
The ten most expensive markets have not altered in the last six months, although their order within the top-ten list has. (Occupation cost in £/sq. ft./annum used throughout this release), Midtown Manhattan is the priciest market in North America at £50, and ranks 12th worldwide.
Of the 171 office markets monitored, 85% saw rents rise in the 12 months ended September 30, 2007. Singapore led the list of markets with the fastest growing office rents, with occupancy costs increasing 83% during the past year
At £161, London’s West End was once again the world’s most expensive office market. Occupation costs in this market are 82% higher than the City of London, where occupation costs rose to £88.50, placing it third in the rankings.
Based on the new rental level of £21 per sq ft achieved by CB Richard Ellis in the pre letting of 17,700 sq ft to Grant Thornton at One Dorset Street, Southampton, typical office occupancy costs of new build office space within Southampton City Centre totals approximately £34.00 per sq ft per annum. This figure compares favourably with London’s West End, which at the end of November 207 stood at a figure of £161.00 per sq ft per annum.
Peter Hall, head of Agency at the Southampton office comments:
“Southampton’s appearance in the EMEA Top 50 demonstrates the result of the current imbalance between supply and demand of top quality space in Southampton city centre. We expect a further rise in rental levels during the course of 2008 as potential speculative office development within the city remains limited to three schemes, none of which are likely to commence construction until late in the year.”
Neville Thompson, Southern Region Managing Director adds:
“Other cities in the UK such as Birmingham in 14th place at £47, Manchester in 16th at £44 and Bristol in 19th at £41 show how our Southern cities are very competitive to other major cities in the UK and are attracting more and more national companies to locate substantial operations in the region.”
Four European markets, Moscow, Oslo, Warsaw and London’s West End were also among the cities with the fastest growing rents. Moscow showed the fastest growth in Europe with a 65% increase in fact, growth has been widespread across Europe over the past year, driven by strong demand and a lack of Grade A space in prime locations in many markets.