CBRE Publishes Latest Survey on Global Prime Office Occupancy Costs
Shanghai, January 6, 2016 – Greater China region dominates the world’s highest-priced office markets, according to CBRE Research’s latest semi-annual Global Prime Office Occupancy Costs survey. Hong Kong’s Central, Beijing’s Finance Street, Beijing’s Central Business District (CBD), Hong Kong’s West Kowloon, and Shanghai’s Lujiazui take up five of the top 10 spots for global prime office occupancy costs. Lujiazui takes the lead in Asia Pacific, with an increase of 9.2% in occupancy costs, far exceeding the region’s average growth rate of 1.9%.
| Top 10 Most Expensive Office Marketsz (per data as of Q3 2015) |
|
| Rank | Market |
| 1 | London - Central (West End), United Kingdom |
| 2 | Hong Kong (Central), Hong Kong |
| 3 | Beijing (Finance Street), China |
| 4 | Beijing (CBD), China |
| 5 | Hong Kong (West Kowloon), Hong Kong |
| 6 | New Delhi (Connaught Place - CBD), India |
| 7 | Tokyo (Marunouchi Otemachi), Japan |
| 8 | London - Central (City), United Kingdom |
| 9 | Shanghai (Lujiazui), China |
| 10 | New York (Midtown Manhattan), U.S. |
In Q3 2015, prime office occupancy costs increased at a 2.4% annual pace globally while Asia Pacific experienced relatively slower growth at only 1.9% year-over-year reflecting impact by China’s economy. However, Shanghai’s Lujiazui moved up to the top ten, driven by strong demand from financial services firms, as well as limited supply, demonstrating significant growth that far exceeds the average market performance in Asia Pacific.
Fion Zhang, Executive Director and Head of Office Services, Eastern China, CBRE, commented: ”Currently in Lujiazui, approximately 60% of the leasing activity is taken by the financial services firms, reflecting its prominent status as Shanghai’s international financial center. Lujiazui has maintained historical low vacancy levels at 0.5% over the past few years. Shanghai Tower, a project we provided services for, successfully achieved over 60% for pre-leasing stage, attracting tenants from both domestic and international companies including Allianz China General Insurance Company Ltd. Shanghai Branch, a leading online payment and financial services group in China and a Chinese subsidiary of UK’s largest insurance organization. As China continues to deregulate its financial services industry, financial services companies will remain as the key driver for prime office market in Lujiazui. In addition, tech firms will be very active as Pudong New District’s strategic positioning to become ‘Shanghai’s global innovation center for technologies’.”
CBRE tracks occupancy costs for prime office space in 31markets around the Asia Pacific region. The impact of the slowdown was more pronounced in markets where capital flow is closely linked to the Chinese economy, with costs in Jakarta, Singapore, Hanoi, Ho Chi Minh City and Perth all declining year-on-year. Looking ahead, as the global services sector continues to grow at a steady pace, the general uplift in office rents and costs is obvious. CBRE expects that the overall global prime office occupancy costs will maintain a moderate growth rate of 2-3%.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2014 revenue). The Company has more than 70,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 400 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.
