Global occupancy costs rose 2.2% in third quarter of 2013
Dubai’s office space market was ranked 23rd globally with costs at $92.56 per square ft. per annum, significantly cheaper than the world’s most expensive office market, according to a CBRE report.
London topped the list as the world’s most expensive office market with overall occupancy costs of $259.36 per square feet, the report said.
Increasing office costs have seen Dubai move up the global ranking by two places over the past three months — from 25th in the second quarter to 23rd in the third quarter.
“Dubai remains the destination of choice for global investors looking to enter the region. They are primarily driven by the prospects of favorable economic conditions, stable political environment, a truly world class infrastructure and a reinvigorated property market. With Dubai winning the rights to host the World Expo in 2020, real estate, hospitality, transport and infrastructure will all see substantial new development over the next seven years,” said Nick Maclean, managing director, CBRE Middle East.
London’s West End unseated Hong Kong-Central as the world’s highest-priced office market, but Asia continued to dominate the world’s most expensive office locations, accounting for four of the top five markets, the report said.
London’s West End’s overall occupancy costs of $259.36 per sq. ft. per year topped the “most expensive” list. Hong Kong-Central followed with total occupancy costs of $234.30. Beijing’s Finance Street, Beijing’s Central Business District (CBD) and Hong Kong’s West Kowloon rounded out the top five.
Globally, occupancy costs rose 2.2 per cent for the 12 months ending 2013 third quarter, up from the 1.4 per cent annual growth rate seen at the end of first quarter 2013. All three of the world’s regions saw annual growth, led by the Americas, at 4.6 per cent, followed by Asia Pacific, at 3.2 per cent, and EMEA, at 0.4 per cent. This performance reflects the relative strength of the recovery across global regions, said CBRE report.
“The growth of occupancy costs for prime office space in the past year underscores that even in a slowly recovering economy, demand for the best space in the best locations continues to be strong,” said Dr Raymond Torto, Global chairman, CBRE Research. CBRE tracks occupancy costs for prime office space in 126 markets around the globe. Of the top 50 “most expensive” markets, 20 are in Asia Pacific, 19 are in EMEA and 11 are in the Americas.
According to a previous CBRE report, the demand for office space in Dubai has been rising, leading to seven per cent quarter-to quarter growth in rents this year.