Hong Kong now has world’s most expensive office space

It tops the world for the costliest business spaces displacing London.

London-based independent global property consultants Knight Frank reported the cost of renting prime office space in the city jumped 28% during 2011 to US$152.16 per square feet a year. It is the steepest increase among all the established financial centres worldwide.

Driving the spike in rents is the huge demand by banks for branches in Hong Kong and in Asia’s leading financial centres. Office rents in Beijing soared by 46% during the year to US$56.83 per square feet, becoming the world’s 19th most expensive location.

The substantial rise in rents in Asia is in stark contrast to most major European financial centers where office rentals have stagnated or are falling as the Eurozone crisis puts a crimp on expansion plans by European banks.

London, formerly the world’s costliest in office space, saw rents fall to US$144.92 per square feet at the end of 2011. Rents remaining flat in markets such as London’s West End and Frankfurt, said Knight Frank.