Return to our Home page Search
Click here for the hotel and hospitality news from around the globe Hotel, Travel and Hospitality Articles Videos and in-depth Interviews
CONCIERGE DESK
Read more now
Read more now
Read more now
Where in the world are the most expensive office areas?
Saturday, 30th November 2013
Source : Jones Lang LaSalle
 

Strong demand from niche financial and technology sectors is driving up the cost of office space in many cities around the globe, but a new analysis by JLL reveals the 12 premier office districts have been the biggest beneficiaries of the trend, witnessing higher competition by companies for space and driving rent prices to new highs.

JLL’s new list of the “World’s Most Expensive Office Areas” reflects a variety of global and regional economic trends and highlights the key factors companies consider when seeking premier office space.

All 12 of the office districts are within the world’s most internationally connected and easily accessible cities, which are home to the greatest number of top global corporate headquarters, the world’s top talent and the highest net worth individuals.

The most expensive office areas for 2013 are:

1. St James’s, LONDON: GBP 125 per sq. ft. per year (USD 194 per sq. ft. per year)
Home to world-leading hedge and sovereign wealth funds, and niche wealth and investment managers, St James’s personifies the West End’s unparalleled accessibility, luxury amenities and proximity to clients.

2. Central, HONG KONG: HKD 105 per sq. ft. per month (USD 162 per sq. ft. per year)
Complemented by first class hotels, luxury retail, excellent transport links and interconnecting walkways, Central is the location of choice for the city’s banking and finance community.

3. Finance Street, BEIJING: RMB 750 per square meter per month (USD 137 per sq. ft. per year)
A Beijing submarket planned specifically for highest-tier financial institutions and major state-owned enterprises, Finance Street also attracts global investment banks and insurance companies.

4. Rue du Rhône, GENEVA: CHF 1,150 per square meter per year (USD 116 per sq. ft. per year)
Rue du Rhône is Geneva’s prime location for private wealth management, banking and luxury retail brands.

5. Menlo Park, SILICON VALLEY, CALIFORNIA: USD 111 per sq. ft. per year
The epicenter of the technology universe, Sand Hill Road in Menlo Park is home to many venture capitalists.

6. Kremlin Area, MOSCOW: USD 1,150 per square meter per year (USD 107 per sq. ft. per year)
Office space in Moscow’s Kremlin area is popular with Russian and international finance and legal tenants. New construction is tightly restricted, and that has helped further boost the value of office space in the area.

7. Fifth Avenue, MIDTOWN MANHATTAN, NEW YORK: USD 104 per sq. ft. per year
Consistently ranked among the most expensive shopping streets in the world, Fifth Avenue is also home to numerous hedge funds looking for top-quality space in Midtown.

8. Raffles Place/Marina Bay, SINGAPORE: SGD 11 per sq. ft. per month (USD 103 per sq. ft. per year)
The heart of Singapore’s financial district is served by a world-class subway system and is a vibrant environment for work, living and play.

9. Golden Triangle, Champs Elysées area, PARIS: EUR 800 per square meter per year (USD 99 per sq. ft. per year)
The center of Paris’s tourism and retailing is also an office hub for high-value-add businesses including international law firms and banks, and corporate tenants seeking accessible, high-quality buildings in close proximity to clients.

10. Marunouchi, TOKYO: JPY 28,600 per tsubo per month (USD 98 per sq. ft. per year)
Marunouchi, located on the west side of Tokyo Station, is a long-established office precinct where the lower floors of buildings typically house luxury retail, and higher floors are office space.

11. Uraniastrasse and Paradeplatz area, ZURICH: CHF 900 / per square meter per year (USD 91 per sq. ft. per year)              
Uraniastrasse and the area round the Paradeplatz in the core CBD of Zurich feature excellent accessibility and amenities, with office space heavily dominated by the banking sector and private wealth management.

12. Lujiazui, SHANGHAI: RMB16 per square meter per day (USD 87 per sq. ft. per year)
Lujiazui was transformed from empty grassland to a bustling financial district in just 20 years and is now Shanghai’s largest CBD, home to 650 Chinese and international financial institutions.

Despite the upheavals in financial markets in recent years, the research points to the financial sector as the primary demand-driver in these top locations. A general lack of available space adds an aura of exclusivity in these supply-constrained areas, luring emerging companies in other sectors, as well retail, hospitality and tourism attractions.

JLL Director of Research Jeremy Kelly says the same set of Global Cities will continue to dominate the list in the years to come, although the order will change with sector-driver market conditions and the continued rise of the technology and mobile sectors. For example, Silicon Valley will continue to climb the list as tech-driven demand continues to push up rental rates.

 “With premium rents in the CBDs of a number of U.S. cities now increasing, we can expect to see additional U.S. markets ranking among the Most Expensive over the next 24 months,” he said.

Market dynamics can also have the converse effect, however. “Tokyo was the most expensive market for office space in the world for many years,” Kelly said, “but it was hit hard by the global financial crisis and has been surpassed by other Asian power cities.”

Notes
1. For further commentary on Jones Lang LaSalle’s “Most Expensive Office Areas” from CEO Colin Dyer, please visit his LinkedIn Influencer blog.
2. The “12 Most Expensive” ranking features quoted rents for the most rarefied part of each of these cities: premium office space in top sub-markets.  Rents will be quite different from the market as a whole.
3. Only one office location has been included per city.
4. The costs PSF are asking rent in local floorspace measurement conventions.
5. Headline asking rents in Sydney would put this city in the Top 12. But taking exceptionally high incentive levels into account -- typically over 30% of gross rent – Sydney lands just outside the Top 12.
6. The list does not include several “emerging” and “frontier” cities, where severe supply issues create exceptionally high rents, such as Rio de Janeiro and Lagos.

  • The extreme example is Luanda, Angola, where asking rents are as high as $200 per square foot.
  • Many of these ‘thin’ markets are not directly comparable to the more mature markets featured on the list.
About Jones Lang LaSalle

Jones Lang LaSalle (NYSE:JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $3.9 billion, Jones Lang LaSalle operates in 70 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of 2.6 billion square feet and completed $63 billion in sales, acquisitions and finance transactions in 2012. Its investment management business, LaSalle Investment Management, has $46.3 billion of real estate assets under management.

Jones Lang LaSalle has over 50 years of experience in Asia Pacific, with over 26, 100 employees operating in 79 offices in 14 countries across the region. The firm was named ‘Best Property Consultancy’ in three Asia Pacific countries at the International Property Awards Asia Pacific 2013, and won nine Asia Pacific awards in the Euromoney Real Estate Awards 2013. www.ap.joneslanglasalle.com

~ Important Notice ~
Articles appearing here contain copyright material. They are meant for your personal use and may not be reproduced or redistributed. While 4Hoteliers makes every effort to ensure accuracy, we can not be held responsible for the content nor the views expressed, which may not necessarily be those of either the original author or 4Hoteliers or its agents.

Learn more about DigiJames - in room technology
Advertisment  
 Related News  (Click title to read article)
Argentina needs more guest beds - focus on mid-class hotels.
Exclusive insights from the recent 25th Deloitte Hotel Investment Conference.
In Focus: Shanghai boutique hotel market scene.
Manhattan’s Midtown is in a real estate crisis. Solution: The Pop-Up Hotel.
 Latest News  (Click title to read article)
China Outbound Tourism Yearbook highlights 4 major market trends in 2014
Monday, 21st April 2014

Differentiation is needed for South Pacific destinations
Monday, 21st April 2014

The highest-rated green hotels in the US
Monday, 21st April 2014

Overcoming seasonality to support economic diversification
Monday, 21st April 2014

Ritz-Carlton reveals its secrets
Sunday, 20th April 2014
 Latest Articles  (Click title to read article)
Knowing Your Customers' Preferences
Monday, 21st April 2014

It's All in the Preparation: Planning Your Perfect Holiday Online
Monday, 21st April 2014

Are You Trying Too Hard, or Not Hard Enough?
Sunday, 20th April 2014

Do Your Job Descriptions Inspire Greatness?
Saturday, 19th April 2014

Creativity & Passion - Keys to Wowing and Returning Guests
Friday, 18th April 2014
 Most Read News  (Click title to read article)
Follow us: LinkedIn, Twitter and Google+
ITB Berlin 2015 Marketing Programs
ITB Berlin 2014 - The Full Coverage
Global Travel Trends 2013/14
Tourism brand: 'Spain' reviewed

© Copyright 4Hoteliers 2001-2014 ~ unless stated otherwise, all rights reserved.
You can read more about 4Hoteliers and our company here

Use of this web site is subject to our
terms & conditions of service and privacy policy