Hong Kong has overtaken London as the most expensive office location in the world, according to Cushman & Wakefield’s annual Office Space Across the World report.
The annual report surveys occupancy costs in 215 office markets across 58 countries worldwide, ranking occupancy costs per workstation and workplace densities for newly developed or refurbished office space globally.
Hong Kong’s average annual cost per workstation rose 5.5% to $27,431, driven by limited availability and strong demand from mainland Chinese corporations. In contrast, costs in London fell 19% on 2016 – albeit largely as a result of currency depreciation – to an average of $22,665 per workstation per annum. Globally, the average annual cost per workstation rose by 1.5%.
Almost two-thirds of the buildings in prime Hong Kong Central have vacancy of less than 5%. Escalating rents in Hong Kong Central are, however, driving a growing number of multi-national corporations to decentralise to lower cost areas.
Overall, office occupancy costs per workstation in Asia Pacific rose by 3.4% in 2017, behind the 4.2% increase in the Americas but outpacing EMEA, which posted a fall of 1.3%.
The average workstation cost in Asia Pacific stands at US$5,900 per year, with Hong Kong, Tokyo and Sydney ranked among the ten most expensive office locations in the world.
According to the report, the rising cost of workstations in Asia Pacific core markets has led to a growing number of multinational corporations seeking office space in secondary cities where costs are lower.
Read more on this trend in and get more figures on how Asia Pacific is faring in the office landscape here.