Dublin office rents are the 12th highest in the world and London’s West End is once again the world’s most expensive office market, while rapidly-rising Moscow climbed to second place, according to CB Richard Ellis Group, Inc. (CBRE) Research’s semi-annual Global Market Rents survey. The report tracks world markets with the highest as well as fastest-growing occupancy costs for the 12 months ended March 31, 2008. Tokyo’s Inner Central Five Wards, Mumbai’s Nariman Point and Tokyo’s Outer Central Five Wards rounded out the top five most expensive markets.
Dublin's office rent at $126.60 per square foot, is just behind Hong Kong and more than double rents in Toronto's Central Business District.
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“Office occupancy costs are continuing to defy sluggish economic conditions and the credit crunch, as they rise faster than global inflation,” said Dr. Raymond Torto, CBRE’s Global Chief Economist. “These cost increases are dominated by emerging markets, caused by both supply and demand imbalance and the depreciation of the dollar relative to local currencies. In some of these emerging markets, Class A office space is seriously lacking.”
Vietnam's Ho Chi Minh City had the fastest-growing occupancy costs during this period, up 94%. Moscow was not far behind at 93%, followed by Singapore at 86%. Overall, EMEA (Europe, Middle East and Africa) dominated the list of markets with the fastest growing occupancy costs, accounting for five of the top 10 and 19 of the top 50 markets. Worldwide, 88% of the 173 office markets monitored posted higher occupancy costs.
Among the most expensive markets, Singapore and Dubai were newcomers to the top 10. Singapore ranked ninth with an occupancy cost of $139.31 (occupancy cost in US$/sq. ft./annum used throughout this release), while Dubai debuted at number 10 with an occupancy cost of $128.49. With a near-doubling of occupancy costs, Moscow rose four places to second at $232.37. Midtown Manhattan was still the priciest market in North America, at $103.43, and ranked number 13 worldwide.
Ho Chi Minh City jumped from 45th to 23rd most expensive globally, with occupancy costs rising to $85.84. Occupancy costs in Tokyo’s Inner Central Five Wards rose to $220.25, while Tokyo’s Outer Central Five Wards increased to $175.35. Perth, Australia, joined the top 50 most expensive, coming in at number 41. Asia Pacific had 11 markets among the 50 with the fastest growing occupancy costs, paced by Singapore (86%) and Mumbai (41%).
At $299.54, London’s West End remained the world’s most expensive office market. Occupancy costs in that market are 29% higher than Moscow, where occupancy costs rose to $232.37, the world’s second-most expensive; and 82% more than the City of London’s $164.18 occupancy cost. In Europe, occupancy costs grew fastest in Moscow, with a 93% increase, and Oslo, Norway, with a 58% increase.
Four North American cities are among the world’s Top 50 most expensive office markets: Midtown Manhattan (13th at $103.43); Calgary Central Business District (CBD) (42nd at $66.27); Toronto CBD (47th at $62.44); and suburban Los Angeles (48th at $62.06). Rio de Janeiro rose to $74.60 (32nd), while São Paulo increased seven spots to 35th at $71.41. North America totaled 16 of the top 50 markets with the fastest growing occupancy costs. The fastest gains were recorded by Miami (29%), Panama City (28%), Seattle (26%) and Houston (25%).