Sydney ranked 9th most expensive world office market

If you are looking to set up a global office then you might want to think carefully about where you set this up if you want to avoid paying staggering occupancy costs as some city areas are far more expensive than others.

According to research published in Cushman & Wakefield’s 2014 Office Space Across the World global rankings, London’s West End comes out top again for the third year running as the most expensive office market worldwide, pushing Hong Kong aside to second position for the second year in a row.

Occupancy costs in London’s West End now reach an amazing USD$264 per sq ft per year, followed by Hong Kong at USD$264 sq ft per year.

New York’s midtown makes number three (USD$131 sq ft per year), moving up two places since 2013, whilst closer to home; Sydney in Australia is the 9th most expensive office market with occupancy costs of USD$99 per sq ft per year, and has moved up one place since 2013.

According to Dr Alex Pham, National Research Manager for Cushman & Wakefield Australia, “As foreign capital continues to pour into the Sydney office market, we believe the cap rates for prime office stock will compress further and the yield spread between prime and secondary assets [will widen].”

He also adds, “In regards to the space market, while the current market condition remains soft, we expect to see some improvement for the Sydney occupancy market underpinned by favourable monetary policies.”

Even though prime rents in London’s West End have increased by 4.6% over the year, they remain 13% behind the peak in 2007. In spite of this, rental growth is expected due to the low supply as well as expected development completions this year.

London is still seen as the gateway to Europe and attracts major international businesses looking to be based there. Both Hong Kong and New York are also important cities for Asia and the Americas as well as around the world.

Throughout the world, global office rents increased by 7% during 2014 which is more than double the circa 3% annual compound increased since 2010.

Here are the top 10 most expensive office markets:

Top 10 world’s most expensive office markets

  1. London – West End (UK)
  2. Hong Kong – CBD (Hong Kong)
  3. New York – Midtown (Madison/5th Avenue) (United States)
  4. Rio de Janeiro – Zona Sul (Brazil)
  5. New Delhi – Connaught Place (India)
  6. Moscow - CBD (Russia)
  7. Tokyo – CBD (5 Central Wards) (Japan)
  8. Beijing – CBD (China)
  9. Sydney - CBD (Australia)
  10. Paris – CBD (France)
Published on 20th of March 2015 by Marty Stanowich
Marty Stanowich
Marty Stanowich

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