Porto and Cape Town have the world's largest office rent increases.
According to a new CBRE report, the increasing cost of leasing prime office space increased globally in the year ended March 31, owing to continued economic growth, job gains, and reduced availability of prime space in some markets. CBRE monitored 122 markets, and 85 of them saw cost increases.
According to CBRE's annual Global Prime Office Occupancy Costs Study, average costs for leasing the best office space in each market's best location rose by 3.6 percent over the previous year, outpacing the 2.4 percent rise the year before. houses
The top ten most expensive markets remained unchanged from the previous year, though a few moved up in the rankings. The top two slots were held by Hong Kong Central ($322 per sq. ft. per year) and London's West End ($222.70), with the former widening the distance between itself and the ground. Midtown Manhattan ($196.89) in New York City, which climbed to the fourth most expensive market this year from sixth last year as businesses found prime space in Midtown corridors and the new Hudson Yards mixed-use building, was the biggest gainer among the top ten.
CBRE describes Prime Office Occupancy Costs as the total cost of occupying the highest quality office space in each market's highest-quality area, including rent, local taxes, and service charges. Prime real estate costs can serve as a barometer for a market's upper echelon, as well as the broader market " Despite slower economies in some regions and turbulent trade discussions, the race to attract and retain talent by securing high-quality office environments has not slowed "Julie, CBRE Americas' Head of Occupier Research, explained the situation. "In reality, as supply in some coveted markets remained constrained, the cost of renting prime office space increased at a faster rate. Banking, insurance, technology, and coworking companies are all in high demand."
In the first quarter, fifteen of the 122 markets studied by CBRE saw double-digit percentage rises in prime office occupancy costs compared to a year ago. A central location, modern infrastructure and transportation options, top social facilities, and a relative lack of accessible prime space are all characteristics shared by many.
Gains were equally distributed across all continents, with each showing a greater increase than the previous year. The Americas gained 3.7 percent, helped in part by Midtown Manhattan's ascension into the top ten. Furthermore, due to the market's densification and transportation options, Atlanta's Bulkhead and Midtown areas saw a 14.2 percent rise, making it the region's fastest growing market.
Europe, the Middle East, and Africa (EMEA) increased by 3.5 percent, with four of the world's five fastest-growing markets located in the area. The 24.7 percent rise in Porto, Portugal, was fueled in part by banking and consumer goods company relocations and expansions.
Asia Pacific (APAC) saw a 3.3 percent rise, nearly doubling its previous year's growth rate. Six of the top ten most expensive markets in the world are in APAC. With a 17.3 percent rise, Singapore jumped into the top 20.