London’s West End has retained its position as the most expensive location in the world to rent office space. According to the latest research from CBRE, total occupancy costs – which include rents, business rates and service charges – now stand at over £160 per sq ft.
Hong Kong, which the West End supplanted as the costliest location last year, remains its closest rival at £142 per sq ft. Beijing’s forty-block Financial Street followed in third place with total costs of £114 per sq ft.
The West End’s ascent to the summit is the result of the combined factors of economic recovery and a shortage of available space. This inflationary cocktail looks certain to push prices even higher, with demand forecast to outstrip supply by as much as 50 per cent over the coming three years.
“Economic improvements have continued to trigger strong demand for space in the capital,” says CBRE executive director Phillip Howells.
“As a result, the market has accelerated significantly over the past 18 months, with leasing activity improving in the core West End market of Mayfair and St James’s in particular.
“With prime space leasing at a premium, and the continuation of steady demand for offices, we anticipate stronger rental growth during the remainder of the year.”
The survey is based on the occupancy costs for prime office space in 126 global markets. The highest rises in occupancy costs were in America, reflecting the US economic recovery.
Previous Post
Property Boss hits out at Banks as his Firm Goes Under
