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Hong Kong is world’s most expensive office location

Richard Aboo, International Partner, Head of Office Agency CEE, Cushman & Wakefield

Hong Kong has replaced London’s West End as the most expensive office market in which to accommodate staff, according to new research from Cushman & Wakefield.  

The annual Office Space Across The World report surveys occupancy costs across 215 office markets in 58 countries worldwide. Using proprietary data, it ranks occupancy costs per workstation and workplace densities for newly developed or refurbished office space globally.

Limited availability and strong demand from mainland Chinese corporations have pushed Hong Kong costs up 5.5 pct to $27,431. Escalating rents are driving a growing number of multinational corporations to decentralise to lower cost areas. As a comparison, for the same cost of accommodating 100 staff in a Hong Kong office, 300 can be accommodated in Toronto, 500 in Madrid, and 900 in Mumbai. 

In contrast, costs in London have fallen 19 pct since 2016 – largely as a result of currency depreciation – to an average of $22,665 per workstation per annum. Paris, also in the top 10 albeit nearly half the cost of London, saw costs fall too. 

At a global level, the average annual cost per workstation rose by 1.5 pct over the last 12 months. This was driven by the Americas where costs increased by 4.2 pctand Asia Pacific, where they rose by 3.4 pct. EMEA posted a fall of 1.3 pct. Currency fluctuations have produced some of the biggest changes in the report’s rankings. For companies looking at their local costs, this factor will exercise them more than property markets over the next year.

Warsaw continues to experience strong take-up putting downward pressure on vacancy levels which are currently at 12.9 pct. This will be further exacerbated next year when supply levels are expected to be at their lowest levels since 2011 . Despite this no rental increase is expected largely due to the impressive pipeline in 2019-21 - said Richard Aboo, International Partner, Head of Office Agency CEE, Cushman & Wakefield. 

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