Two Hong Kong locations snag spots in world's priciest office locations list

Can you guess which these are?

Asia continued to dominate the world’s most expensive office locations, accounting for seven of the top ten markets. London’s West End district remained the world’s highest-priced office market, while Central and West Kowloon in Hong Kong snagged spots as well.

According to a release from CBRE, data from its biannual Global Prime Office Occupancy Costs survey show that London West End’s overall prime occupancy costs of US$274 per sq. ft. per year topped the list of most expensive office markets, followed by Hong Kong’s Central district with total prime occupancy costs of US$251 per sq. ft.

Beijing (Finance Street) came in third at US$198 per sq. ft., Beijing (Central Business District (CBD)) at US$189 per sq. ft., and Moscow (US$165 per sq. ft.) rounded out the top five. New Delhi (Connaught Place CBD), Hong Kong (West Kowloon), Tokyo (Marunouchi Otemachi), and Shanghai (Pudong) also features in the top ten ranking. Singapore ranked number 14 at US$112.91 per sq. ft.

Moray Armstrong, Executive Director, Office Services, said “Notwithstanding Singapore’s strong rental growth last year (+14.7%), the city’s current office occupation cost does not appear out of step with comparable global business centres.”

Here's more from CBRE:

The change in prime office occupancy costs mirrored the gradual, multi-speed recovery of the global economy. Global prime office occupancy costs rose 2.5% year-over-year, led by the Americas (up 4.1%) and Asia Pacific (up 2.8%).

“We expect the gradual recovery of the global economy to continue, leading to better hiring rates and further reduction in the availability of space across most markets over the near term,” said Richard Barkham, Global Chief Economist, CBRE.

“In this environment, we expect occupancy costs to continue rising from current levels, further limiting options for occupiers. Technology, quality and flexibility are expected to increasingly come into consideration in space use and location decisions, as occupiers will seek to contain costs and improve productivity.”

CBRE tracks occupancy costs for prime office space in 126 markets around the globe. Of the top 50 most expensive markets, 20 were in Asia Pacific, 20 were in EMEA, and 10 were in the Americas. Asia Pacific had 20 markets ranked in the top 50 most expensive, including seven in the top ten.

Of the top 50 markets which saw the largest annual increases, Singapore was ranked fifth, recording a 16.5% increase in occupancy costs as at Q3 2014. Mr Armstrong commented “The Singapore office sector performed within expectations in 2014 with rental levels advancing off low prevailing vacancy rates.

Looking ahead, limited availability of office space will continue through 2015 with relief to occupiers only when the next wave of major new supply arrives in H2 2016. In these circumstances we anticipate further rental growth particularly in the early part of the year. The pace of rental growth may slacken later in 2015 and going into 2016 as the impact of sizeable future supply becomes apparent.”

Occupier activity in this region was largely driven by domestic corporations and companies in the technology, media and telecommunications sectors. Half the markets saw costs increase above 1%. The Central district in Hong Kong remained the only market in the world—other than London’s West End—with a prime occupancy cost exceeding US$200 per sq. ft. The most expensive market in the global ranking from the Pacific Region was Sydney at US$99 per sq. ft., in 19th place.