Fanfare please! Hong Kong is now home to the most expensive serviced offices in the world. Figures released for 2010 show the average annual occupancy price per workstation is £13,730, a 31% increase from 2009, when London’s West End occupied the top spot. London was overtaken despite registering a 4% rise, to £12,396 per workstation.
Occupancy cost per workstation is defined simply as the price of an office unit divided by the number of occupants. Cost calculations comprise rent, maintenance and property tax.
Geneva, Tokyo and Zurich complete the top five with Hong Kong’s prices predicted to continue a steep upward trajectory through to 2015.
The figures will be seen as good news for the UK economy; they signal a healthy interest in London’s serviced offices and remove an accolade that potentially discourages new enterprises from examining London as a serviced offices option.
Before the recession London prices were so high that some commercial property experts recommended investors look elsewhere in the EU for better value. Then, once the recession began to bite, many developments were put on hold or scaled back. Relative prices fell but inevitably a shortage in supply will result in them rising again; but let’s hope this will be tempered by the need to continue to encourage business to move to the capital.
Hong Kong is seen as a volatile rental market, prone to extreme cyclical movement. Losses on prime rent were recouped in a year, a rollercoaster ride of rising and falling which the UK in its ‘Age of Austerity’ will want to avoid.
Substantial developments at Leadenhall and Fenchurch St, due for completion in 2014/15, should consolidate London’s serviced offices supply.
It is anticipated that, once finished, these serviced offices will be let to new and existing businesses at ‘reasonable’ rates. London’s office space, of which serviced offices form a significant proportion, accounts for a hefty percentage of the country’s total GDP.
A commitment to providing further serviced offices would inspire confidence and act as a catalyst for further growth opportunities.
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