Prime office rent in Hong Kong's Central hit US$264 psf per year.
Hong Kong is the world’s highest-priced office market, according to CBRE Group, Inc.’s new Global Prime Office Rents survey.
European markets showed the most consistent growth in prime office rent, mostly due to a lack of supply. Belfast (up 25 percent year-over-year) led the way among the 121 cities surveyed.
Hong Kong had two of the top three most expensive office markets. Hong Kong (Central) held the top spot with prime office rent of US$264 per sq. ft. per year and Hong Kong (West Kowloon) (US$163 per sq. ft.) was third.
Rounding out the top five were two Chinese markets -- Beijing (Finance Street) (US$179 per sq. ft.) at #2 and Beijing (Central Business District (CBD)) (US$156 per sq. ft.) at #4 -- and London’s West End (US$146 per sq. ft.).
Global prime office rents—which reflect rent, excluding local taxes and service charges for the highest-quality, “prime” office properties—rose 2.3 percent compared with a year-earlier for the 12 months ended December 31, 2016.
Prime rent growth in Asia Pacific averaged 1.8 percent and was strongest in gateway cities. Hong Kong (West Kowloon) was the fastest-growing market in Asia with a rent rise of 9.3 percent due to strong demand from Chinese companies and very tight supply conditions.
“With the strong demand from PRC financial firms for Grade A office space in Central, we expect that the office rents in Central will continue to rise this year,” said Alan Lok, Executive Director, CBRE Hong Kong Advisory & Transaction Services – Office. “While MNC firms are continuing to decentralize, it will take time for the price gap between rents in Central and non- core areas to narrow as the vacancy rate in Central remains at a historical low.”
CBRE tracks office rents for prime office space in 121 markets around the globe. Of the top 50 “most expensive” markets, Asia Pacific led the list of most expensive prime office rents with seven of the top 10 most expensive markets—Hong Kong (Central), Beijing (Finance Street), Hong Kong (West Kowloon), Beijing (CBD), Tokyo (Marunouchi/Otemachi), Shanghai (Pudong) and New Delhi (Connaught Place - CBD).
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