TOKYO - Central Tokyo office costs have risen 13 per cent in the past year, making it the second most expensive rental area in the world after London's West End, real estate broker CB Richard Ellis says.
It says the total occupancy cost of prime space in Tokyo's inner centraldistrict rose in the past 12 months to US$1023 ($1474) a square metre a year. Similar rents in London's financial district slipped 0.3 per cent to US$929 a square metre, dropping it to fourth from second.
Paris at No 5 and Moscow at sixth showed rents in continental European cities to be rising faster outside the UK than in Britain.
Richard Ellis said a lack of speculative office developments and rising demand, particularly from financial companies such as banks and insurers, had combined to cut vacancies, prompting owners to raise charges or cut such incentives as rent-free periods.
"Strong demand and diminishing space availability acted to boost rental growth in most major business centres in Asia," it said, offsetting weakening economic conditions in Europe.
"The slow recovery in the office market has gathered pace so far this year."
Total occupancy costs, including taxes and maintenance charges, in London's West End rose 0.7 per cent over the past year to US$1394. Midtown Manhattan has the most expensive office space in the US at US$418. That's 27th of the top 50 locations as measured by CBRE compared with 20th a year earlier.
Moscow jumped to the sixth most expensive place in the world for offices behind the two London districts, two in Tokyo and Paris.
Costs now total US$665 per square metre a year in the Russian capital, 29 per cent higher than a year earlier as high levels of construction failed to keep pace with demand.
Richard Ellis said eight of the 20 most expensive office locations in the world were in the UK.
- BLOOMBERG
Top 10
* London's West End. * Inner central Tokyo. * Tokyo's outer central district. * London financial district. * Paris. * Moscow. * Dublin. * Hong Kong. * Edinburgh. * Manchester.
