THE DAYS when Asia’s big cities functioned as low-cost operating environments are numbered, or indeed long gone, especially in China. Asia-Pacific now accounts for six of the top 10 most expensive occupier markets worldwide, according to a recent report by the commercial property company CBRE.
Business districts in Beijing and Guangzhou had the biggest increases in office occupancy costs globally in the first quarter, the report showed.
Two areas in Beijing – Jianguomen/Central Business District and Financial Street – topped the survey, with increases of 49 per cent and 42 per cent respectively from a year earlier, the Los Angeles-based company said.
Guangzhou, southern China’s biggest city and capital of the economic powerhouse of Guangdong, was third, with a 40 per cent increase.
After that came Shanghai’s Pudong district, Jakarta, Sydney and Bangalore, with two areas in San Francisco and Moscow rounding out the top 10.
Multinational corporations are moving to China and other emerging economies to tap into growth there, while demand for prime office space in first-tier cities in China, which is still the world’s fastest growing major economy, is being driven by a lack of new supply and strong expansion of domestic financial institutions.
“The most expensive office markets are increasingly located in dynamic business centres across emerging economies as office occupiers diversify their global footprints in these markets to take advantage of rising incomes and the availability of labour,” said Raymond Torto, CBRE’s global chief economist. “They also have a diversified economic base; limited, available institutional quality space; strong currencies, and [they] are increasingly located in urban centres.”
In terms of prime office occupancy costs, central Hong Kong’s big office rents have come down by 17 per cent in the past year, meaning Central – the part of downtown Hong Kong on the island – remains the most expensive place in the world to set up shop. You pay nearly $249 (€203) per square foot to rent office space there.
The situation is only slightly better across the harbour in Kowloon, which came in as seventh most expensive at €130 per square foot. In second place is London, at nearly €180, and Tokyo is third at €152. In this ranking, however, China is also moving fast, and Jianguomen in China’s capital is fourth with €147.
Of the 15 biggest decliners in office costs, Dublin was present with three Spanish cities, two Greek cities, Zurich and Sofia.
