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Most expensive cities to have an office in
A recent study has shown the variation of the office rental market and how it differs from city to city. We give you the 10 most expensive cities to have a workplace in
July 24, 2012 9:55 by Muhammad Aldalou
A recent study has revealed, not to anybody’s surprise, that Dubai has made the list of the world’s most expensive office rental markets. The study was conducted by CB Richard Ellis, a real estate services firm which planked the Middle Eastern city on the 25th of the list and divided the other 49 among Asia, Americas and EMEA.
The study takes into consideration the overall occupancy cost and in Dubai it landed on a $92.56 per square foot. Abu Dhabi, capital city of the United Arab Emirates, has seen a substantial plunge in office rentals. Two cities, barely 200 km away and yet they carry such a distinctive commercial (and residential) market flow but although Dubai has made a strong business name for itself, its commercial value is still miles beneath the surface.
Which brings us to the FIRST on the list; one may look upon the commercial slump in Mainland China, but it certainly carries little representation for Hong Kong which topped the list as the world’s most expensive office rentals market, according to the study.
It hits an overall occupancy cost at a whopping $248.83 per square foot, averaging almost 3 times greater than Dubai but only about $30 more than London’s West End. Of the top 50 most expensive markets, 19 are in Asia Pacific, 19 in EMEA and 12 in the Americas.
“The most expensive office locales are increasingly located in dynamic markets across the emerging economies as office occupiers diversify their global footprints in these markets to take advantage of rising incomes and the availability of labor,” said Raymond Torto, CBRE’s global chief economist.
Naturally, we can’t forget the posh West End of London which topped second on the list after HK; coming at an average of $220.15 per square foot; followed closely by the Japanese capital, Tokyo.
Despite these cities having extremely high prices for commercial rentals; they certainly must have other factors of magnitude to attract the amount of business and investment that they do. In fact, you don’t have to be an economist to know that when you hear the words Tokyo, Hong Kong, London and Dubai all you hear is Money, Business, Luxury and lots and lots of Tourists.
Kipp thought it would be thoughtful to give you a list of the top 10 most expensive cities to have an office in;
1. Hong Kong: $248.83 per square foot.
2. London – Central (West End), United Kingdom: $220.15
3. Tokyo, Japan: $186.49
4. Beijing (Central District), China: $180.76
5. Moscow, Russian: $171.53
6. Beijing (Finance Street), China: $166.89
7. Hong Kong (Kowloon), Hong Kong: $158.72
8. São Paulo, Brazil: $144.75
9. New Delhi (Connaught Place – Downtown), India: $140.21
10. London – Central: $131.51
Dubai’s commercial market has been receiving mixed signals of development where in 2010, the overall occupancy costs stood at $108.92 per square feet. However, CBRE clarified that since there has been a change in methodology in the new report; a comparison would be moot! The effectiveness of a study is the ability to compare that with previous studies to note progression or decline.
Although the supply gap in the city has had its ups and downs, Merrill Lynch has but a few days ago announced that Dubai is on a ‘strong economic footing’ and that investing in real estate now would be a smart move.