World’s Most Expensive Office Space by Location: Is Yours Set to Skyrocket?

NEW YORK – Office space prices in many markets are rising in the wake of a recovering economy. Of course, some cities remain more expensive than others – even on the executive office suites front.

So the current state of office space begs the question: Are you renting the most expensive office space in the world? Unless you are in Europe, the answer is no. But let’s look at the latest office space pricing research from Cushman & Wakefield because, after all, expensive is relative.

We’ll start in Europe. London is the world’s most expensive office market for the second consecutive year. Cushman & Wakefield finds a lack of high quality office space characterized a number of European markets, including London and Frankfurt. With demand in these cities growing over the past year, the commercial real estate firm reports prime rents are seeing upward pressure.

Now let’s bring it home to the U.S. The U.S. is actually the sixth most expensive office market in the world. New York is the most expensive city and Midtown Manhattan is the most expensive location for office space. Hong Kong, Russia, China and Japan are all more expensive than the United States, which is good news for U.S. entrepreneurs.

Hong Kong is the second most expensive city in the world for office space. China is fourth and Japan is fifth. CushWake reports rental growth was largely flat across Asia Pacific over the year, with an overall regional rental rise of just 2 percent in 2013. Indeed, the region is well represented in terms of the most expensive office locations on a global scale.

While Hong Kong retained its position in second place overall, Beijing came in fourth position and Tokyo in fifth. CushWake anticipates Asia Pacific’s performance in 2014 to be similar to that seen in 2013, with slow and stable demand anticipated to keep rental levels largely unchanged, albeit with incentives becoming more competitive.

For 2014, CushWake expected to remain on course for continued growth, slow but solid as last year, still supporting occupier demand across the region. The key economies of China, Japan and Southeast Asia are anticipated to drive the region forward, with demand for office space particularly in these countries gaining momentum over the year.

“While still relatively soft, notably from larger occupiers, demand for prime office space in Central stabilized in 2013,” says John Siu, Managing Director of Cushman & Wakefield Hong Kong. “As a result, rents declined by only 1 percent last year. New supply is extremely limited, but occupier demand remains susceptible to volatility in the financial sector and global economy. Therefore, we are expecting Central rents to be stable in 2014.”

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