Economic review

HK crowned as world’s most costly office location

2017-12-05 10:43:00 (Beijing Time)         Shanghai Daily

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Hong Kong has replaced London's West End as the world's most expensive office location as costs in the UK capital fell amid currency depreciation, global property consultancy Cushman & Wakefield said in its latest research.

Limited availability and strong demand from Chinese mainland companies has pushed staff accommodation costs in Hong Kong up 5.5 percent to US$27,431 per workstation per annum, according to Cushman & Wakefield's annual Office Space Across The World report, which surveys occupancy costs across 215 office markets in 58 countries worldwide.

Costs in London dropped 19 percent from 2016 to US$22,665 per workstation per annum, still twice as expensive as Paris or Frankfurt.

Tokyo in Japan grabbed the No. 3 ranking where it cost enterprises an average US$18,111 per workstation per annum to accommodate staff.

Beijing, at US$11,323 per workstation per annum, ranked No. 12 on the list.

"In the Chinese mainland, Beijing remains the most expensive office market despite generally stable rental growth over the 12 months ending September 2017," said James Shepherd, China's managing director of research for Cushman & Wakefield.

"A massive supply wave set to hit first-tier Chinese cities through 2020 should keep rental prices in check though occupiers may well look to leverage the prevailing opportunities to renegotiate or upgrade premises at cost-effective rates."

Around the globe, the average annual cost per workstation climbed 1.5 percent over the last 12 months, mainly driven by the Americas where costs rose by 4.2 percent, and the Asia Pacific, up 3.4 percent. EMEA (Europe, Middle East and Africa) saw a fall of 1.3 percent.

Currency fluctuations have produced some of the biggest changes in the report's rankings, the consultancy said.

Along with rising occupancy costs, workplace density ― the number of workers within a given space ― has also risen globally in 2017.