Knight Frank name London’s West End as second most expensive office space location in the world.
Hong Kong rents grew 28% in 2011 to knock the West End into second place.
London’s West End is now the second most expensive place to rent office space in the world – that’s the message from Knight Frank’s 2012 review of global real estate markets.
The firm found the capital’s upmarket area was knocked into second place after Hong Kong office space rents grew 28% in 2011 – a stark contrast to the West End’s growth which slowed last year following a 31% rise in 2010. Statistics show that while rents in the West End rose by 9% in the first half of the year, they remained stagnant during the last six months of 2011 as uncertainty over the UK economy grew.
Tokyo, Paris and Singapore completed the top 5 most expensive locations to rent office space in the world, while the City of London, Geneva, Sydney, Moscow and Perth were also in the top 10. Beijing was named as the biggest mover in the top 50 list after climbing 29 places to 19. Prime office rents in the Chinese capital rose 46% in 2011, with double digit growth also forecast for 2012.
Looking ahead, the rental forecast is mixed for the top 50 office space locations. Rents are forecast to rise in 18 locations, remain stagnant in 21 locations and fall in 11 locations.
Commenting on the latest results, senior analyst at Knight Frank Matthew Colbourne said: “Office occupiers remain cautious in many international markets, particularly with concerns over the strength of the global economy, and the future of the Eurozone, resurfacing in recent months. The pace of prime office rental growth in Europe slowed significantly in the second half of 2011, with rents remaining essentially flat in markets such as London (West End) and Frankfurt.”
“Asian cities are experiencing mixed fortunes; while confidence remains high in mainland China, falling office rents were observed in late 2011 in markets dependent on demand from international financial occupiers, such as Hong Kong and Singapore.”