London 's West End and Moscow are the most expensive office property markets in the world according to the latest commercial rent report…
Hong Kong's CBD, Tokyo's Inner Central District and Mumbai's Nariman Point are next in line says the report from consultants CB Richard Ellis that tracks world markets with the highest, and fastest-growing, occupancy costs for the 12 months to the end of September.
Abu Dhabi had the fastest growing occupancy cost which increased by 94.6 per cent while the average rate of growth for office occupancy costs among the 172 markets monitored in the survey was eight per cent, almost double last year's world inflation rate.
The rise in occupancy costs in Abu Dhabi is attributed to limited supply of quality office space and high demand from international firms, primarily law firms, financial institutions, real estate and construction companies.
The report also revealed that Asia Pacific was the fastest growing region among markets in the top 50, at an average rate of 26.2 per cent. Among these was Ho Chi Minh City, Vietnam, which was up 51.4 per cent due to demand for a limited supply of prestige prime office buildings.
Occupancy costs in the six Latin American markets that made the top 50 fastest growing rankings grew an average of 21.5 per cent, with Santo Domingo, Dominican Republic, and Lima, Peru making the list for the first time.
São Paulo, Brazil, led the region and was the seventh fastest growing market overall, up 34 per cent. São Paulo's occupancy cost increase reflects a shortage of prime office space combined with a relatively strong local economy supported by global demand for commodities and a growing middle-class.
'Our current perceptions are greatly affected by the current economic malaise and we tend to forget how fast rents and occupancy costs were rising over the last 12 months. Clearly the rate of change is generally slowing, and in some markets the pricing direction is down,' said Dr. Raymond Torto, CBRE's Global Chief Economist.
'The turn in rent trajectory will provide some relief to occupiers and angst to owners. However, unlike previous downturns, which have occurred simultaneously with extensive overbuilding, the real estate market globally today is in a stronger position to weather the difficulties than in the past,' he added.