Hong Kong may have just experienced a year of street protests and falling retail sales, but the city has clung to its title as the world’s most expensive place to rent an office, according to a recent survey by property consultancy Knight Frank.
Finding a home for your law firm, investment bank or wealth management fund in a prime Hong Kong location will cost you an average of $255.50 per square foot per year (approximately RMB 48 per square metre per day), according to Knight Frank’s annual Global Cities report, which examines office occupancy trends in markets around the world.
While Hong Kong maintains its title as the priciest place, the Chinese cities of Shanghai and Beijing both stood out for the rapid growth in the price of renting prime office space, with Shanghai experiencing the third highest increase in office prices globally over the first half of 2015.
Shanghai Edged Out By London and San Francisco
In the first half of 2015 Hong Kong office occupiers caught something of a break compared to their counterparts in other parts of the world, with rents rising only 1.9 percent from the end of 2014 through the last day of June.
|City||Prime Rent ($/Sqft/Yr)||6 Months Growth|
|New York City||153||2.00%|
By comparison, tenants in the city of London, where prime office rents rose at the fastest clip of any major city had to pay 10.7 percent more by the end of June than they would have if signing a lease before New Year’s Day. Average prime office rents stood at $122 per square foot per year in London by mid-year.
San Francisco, where the fever for high tech startups has seen online firms such as Twitter become major occupiers, was next behind London for rental growth with rents rising by 8.2 percent in the first six months of the year, according to Knight Frank. Getting prime space in the city by the bay will now cost you an average of $105 per square metre per day.
Shanghai and Beijing Still in Top 15 Most Expensive Places to Rent Space
Maybe its the smog or the corruption crackdown keeping people away, but Shanghai still looks cheap compared to the world’s biggest business centres, with prime office rentals averaging $72.75 per square foot per year at the end of June (RMB 13.7 per square metre per day in local terms), according to Knight Frank’s data. Shanghai ranked as the 11th most expensive city globally for prime office rentals.
Nicholas Holt, Head of Research at Knight Frank Asia Pacific, says, “Despite the slowdown of China and its impact on the region’s economies, the Asia Pacific region will still see relatively strong economic growth over the coming years. Propelled by the huge forces of urbanisation, Global Cities in Asian countries like China and India will see much growth in the next three years.”
Beijing which had experience the fastest growth in office rentals of any major city in the world since 2007, saw rates slide by one percent in 2015, with prime space leasing for $67 per square foot per day (RMB 12.6 per square metre per day). Beijing ranked 13th globally for prime office rental rates.