As the global economy recovers and heals, demand grows for all types of property. Global office rents increased 7 percent last year according to Cushman & Wakefield, more than double the approximate 3 percent annual compound growth rate seen from 2010 through 2013.
Where office rents rise the most, however, is a pure function of supply and demand. It is not uncommon to have a 10-year or greater planning, permitting and building horizon in some cities for new high rise offices, further limiting supply and putting upward pressure on rents. In some markets, where demand is great and supply severely restricted, annual rents and occupancy costs are greater than the sales price of offices in many cities.
So where are the most expensive office markets in the world? To answer that, Cushman & Wakefield aggregated their annual 10 Most Expensive Locations by Country report. The following table shows the 10 most expensive countries in annual office occupancy costs and where in that country office costs are the greatest.
To read the entire article from World Property Journal click http://www.worldpropertyjournal.com/real-estate-news/united-kingdom/london-real-estate-news/london-office-rental-rates-2015-most-expensive-office-markets-cushman-wakefield-annual-office-space-across-the-world-global-rankings-george-roberts-james-young-john-siu-8910.php
To view the 2015-2016 Global office forecast from Cushman & Wakefield click http://www.cushmanwakefield.com/~/media/global-reports/Global%20Office%20Forecast_2015-2016-1205.pdf
Another perspective can be seen in the annual rankings by CBRE of global office costs by market is available at http://www.cbre.com/EN/aboutus/MediaCentre/2014/Pages/Global-Prime-Office-Occupancy-Costs-YE-2014.aspx
JLL’s research synopsis can be seen at http://www.jll.com/gmp/market-perspective/office and http://www.jll.com/Documents/research/pdf/jll-global-market-perspective-q1-2015.pdf
As the global economy improves, demand for offices will continue to expand and rents will increase.
This is good news for owners, but presents challenges for tenants.