West Kowloon Office Rent Increases the Most in Asia Pacific
Hong Kong, March 24, 2017 – Hong Kong is the world’s highest-priced office market, according to CBRE Group, Inc.’s new Global Prime Office Rents survey. European markets showed the most consistent growth in prime office rent, mostly due to a lack of supply. Belfast (up 25 percent year-over-year) led the way among the 121 cities surveyed.
Hong Kong had two of the top three most expensive office markets. Hong Kong’s (Central) held the top spot with prime office rent of US$264 per sq. ft. per year and Hong Kong (West Kowloon) (US$163 per sq. ft.) was third. Rounding out the top five were two Chinese markets -- Beijing (Finance Street) (US$179 per sq. ft.) at #2 and Beijing (Central Business District (CBD)) (US$156 per sq. ft.) at #4 -- and London’s West End (US$146 per sq. ft.).
Global prime office rents—which reflect rent, excluding local taxes and service charges for the highest-quality, “prime” office properties—rose 2.3 percent compared with a year-earlier for the 12 months ended December 31, 2016.
Prime rent growth in Asia Pacific averaged 1.8 percent and was strongest in gateway cities. Hong Kong (West Kowloon) was the fastest-growing market in Asia with a rent rise of 9.3 percent due to strong demand from Chinese companies and very tight supply conditions.
“With the strong demand from PRC financial firms for Grade A office space in Central, we expect that the office rents in Central will continue to rise this year,” said Alan Lok, Executive Director, CBRE Hong Kong Advisory & Transaction Services – Office. “While MNC firms are continuing to decentralize, it will take time for the price gap between rents in Central and non-core areas to narrow as the vacancy rate in Central remains at a historical low.”
CBRE tracks office rents for prime office space in 121 markets around the globe. Of the top 50 “most expensive” markets, Asia Pacific led the list of most expensive prime office rents with seven of the top 10 most expensive markets—Hong Kong (Central), Beijing (Finance Street), Hong Kong (West Kowloon), Beijing (CBD), Tokyo (Marunouchi/Otemachi), Shanghai (Pudong) and New Delhi (Connaught Place - CBD).
Source: CBRE Research, Q4 2016.
CBRE’s Global Prime Office Rents survey is performed semi-annually.
1. The Global Prime Office Rents report is a survey of office rents for prime office space in 121 cities worldwide.
2. The survey provides data on office rents as of December 31, 2016.
3. The Largest Annual Changes rankings are based upon occupancy costs in local currency and measure. The Most Expensive ranking is based upon occupancy costs in US$ per sq. ft. per annum.
4. The figures given in this release refer to office rents. This represents rent on a net-basis (exclusive of service charges and taxes). The office rent figures have also been adjusted to reflect different measurement practices from market to market.
5. Due to methodology changes, comparisons with figures in previously released reports
Neither CBRE nor its affiliated companies make any warranties or claims on the implied accuracy of the information contained herein.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2016 revenue). The company has more than 75,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.