London's West End is once again the most expensive location in the world for office space occupiers, according to DTZ's latest Global Occupancy Costs survey. Ranked fifth in last year's survey, London's West End has taken the number one spot, displacing Tokyo.
London's West End is once again the most expensive location in the world for office space occupiers, according to DTZ's latest Global Occupancy Costs survey. Ranked fifth in last year's survey, London's West End has taken the number one spot, displacing Tokyo.
It also jumps above Paris, Dubai and Hong Kong, which were ranked second, third and fourth. Paris and Dubai have now fallen from the top five to take sixth and eleventh place respectively, whilst Hong Kong stays put in fourth place.
The West End's rise follows a short, sharp rental correction in 2008. This is in contrast with the other top-four locations, which saw their rents decline during the course of 2009. Overall, all the top 10 global locations experienced either negative or neutral growth in occupancy costs during 2009.
Emerging as new entrants within the global top 10 were Zurich, Boston and Frankfurt, which ranked eighth, ninth and tenth respectively. The shift in position of these markets was due to more moderate rental decline in comparison to other locations.
A number of locations became much less expensive. Paris and Dubai in particular dropped out of the top five in the global ranking, whilst Moscow became even more affordable after it shifted from 11th to 36th place. However, the sharpest falls within the global ranking were recorded in those markets which have seen significant rental growth in recent years, most notably Singapore and Kiev, which both saw occupancy costs plummet by 51% year-on-year (in local currency).
'With falling rents and more supply to choose from, the office market will offer tenants real value for money in the current climate, and we may see multi-national companies taking advantage of this shift and relocating their operations accordingly,' said Karine Woodford, head of Real Estate Strategy at DTZ.