London, Mumbai top list of most expensive office markets

Real Estate Weekly, Nov 28, 2007

London's West End, Mumbai, the City of London and Moscow are the top four most expensive office markets in the world, according to CB Richard Ellis Research's semi-annual Global Market Rents survey.

The report tracks the world's most expensive markets as well as markets with the fastest growing rents over the past 12 months.The top ten most expensive markets list is unchanged over the last six months; however, several cities' rankings have changed. Mumbai's Nariman Point, at $189.51 (occupation cost in US$ per square foot per year), rose three places to second.

At $180.78, Moscow joined the top five, jumping two spots to fourth overall. Tokyo's Inner Central Five Wards and Outer Central Five Wards fell to filth and sixth, respectively. Midtown Manhattan is the priciest market in North America, at $100.79, and ranks #12 worldwide.

Singapore led the list of markets with the fastest growing office rents, with occupancy costs increasing 83% during the past year. North America accounted for more than one-third of the top 50 markets with fastest growing rents, including two in the top 10: suburban Los Angeles, with year-over-year rent growth of 45%; and Edmonton, Canada, with 43% rent growth over the last 12 months.

In Europe, the rents grew fastest in Moscow, with a 65% increase, and Oslo, with a 49% increase.

Of the 171 office markets monitored, 85% saw rents rise in the 12 months ended September 30, 2007.

Singapore jumped from 24th to 11th most expensive globally, as rents rose to $102.37 over the last 12 months. Occupation costs in Tokyo's Inner Central Five Wards rose to $178.61, while the Outer Central Five Wards increased to $154.56. Brisbane, Australia joined the top 50 most expensive, coming in at number 47. In terms of rent growth, Mumbai's Nariman Point posted an increase of 55%.

At $328.91, London's West End once again was the world's most expensive office market. Occupation costs in that market are 82% higher than the City of London, where occupation costs rose to $180.80, the world's third most expensive. Also notable in the region was Warsaw, where rents jumped 47% in the last year.

Five North American cities are among the world's Top 50 most expensive office markets: Midtown Manhattan (12th); Calgary Central Business District (CBD) (34th); Toronto CBD (35th); and newcomers suburban Los Angeles (36th) and Downtown Manhattan (46th). Rio de Janeiro rose to $65.35 (33rd), while Sao Paulo inched up two spots to 40th at $59.25.