World’s Most Expensive Offices Almost Shut Out U.S.
New York barely makes a top-10 list of the world’s priciest office markets, as the global economy gradually recovers. But Seattle ranks in the top five for occupancy cost increases as it adds tech jobs.
London’s West End topped the bunch and Asia dominated generally in CBRE (NYSE:CBG) Research’s Global Prime Office Occupancy Costs survey out this week.
That section of London sees prime occupancy costs of $ 267 per square foot annually, followed by Hong Kong’s central district at $ 254 and Beijing’s Finance Street at $ 196.
Just to put it in a visual context, 2,000 square feet — a typical house size — would cost $ 534,000 a year to rent (plus local taxes and service charges) if you dropped it in the middle of London’s West End office district.
U.S. cities where tech jobs are on the rise accounted for some of the biggest occupancy cost increases, with Seattle making the top 5 globally, in a 22% annual hike. Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT) are among high-profile tech employers there, and the list has grown with Facebook (NASDAQ:FB), Tableau Software (NYSE:DATA) and Zillow (NASDAQ:Z).
The study “found that the real estate recovery in the Emerald Isle (Ireland) remained on track, with Dublin (26.1%) and Belfast (13.3%) showing the largest and fourth-largest year-over-year prime occupancy cost increases, respectively among the 127 cities surveyed,” CBRE said in its report. “In North America, real estate fundamentals remained strong with Seattle (downtown), San Francisco (peninsula) and Vancouver (suburban) among the 10 markets with the fastest growing prime occupancy costs.”
While New York was the 10th costliest city in the world, that rank was for midtown Manhattan. Downtown Manhattan ranked No. 25, after Sydney.
Follow Donna Howell on Twitter: @IBD_DHowell.