London has retained the dubious title as the world’s most world's most expensive office location according to the sixth annual Global Office Occupancy Costs survey carried out by property consultants DTZ.
London’s West End has the most expensive rents, followed by the City.
The report also reveals that large rental falls in several global locations have pushed Birmingham and Manchester into the top ten for the first time and means these cities now hold sixth and tenth positions respectively.
The report is a guide to leasing costs in major prime office locations covering 92 business districts in 44 countries worldwide. Beyond office occupancy costs, it also details the average office space allocated per workstation across cities and enables companies to make comparisons of total occupancy costs on a per workstation basis.
The office markets in most major international cities weakened in 2002. Cost-containment remained a major consideration for occupiers as continued corporate restructuring and downsizing, accounting scandals and the threat of war in the Middle East and the lingering effects of September 11th left most global economies with weaker than expected performances. High levels of available space to be sub-let space remains a key feature in many markets.
Ten Top Most Expensive Office Locations by Occupancy Costs
1. London (West End)
2. London (City)
3. Tokyo (Central 5 Wards)
7. New York City (Mid town)
9. Hong Kong
Elspeth Lochhead, Director, DTZ Pieda Consulting, explained that there has been a mixed pattern of change in occupancy costs around the world over the last 12 months. “Costs in a number of world cities have decreased – including London, Frankfurt, Dublin and downtown New York,” she said. “In the major Asian cities of Tokyo, Hong Kong and Beijing, costs have continued to fall again this year, as have those in some US cities, notably Boston and Washington DC. Conversely occupancy costs in a number of European cities have risen significantly, and in particular in Milan, Paris and many UK cities outside London.”
John Forrester, Head of Occupier Services at DTZ added, "The relatively high ranking positions of UK cities, whilst in the main are due to falling rental values in other countries, can also be largely attributed to the following factors; strength of sterling, exclusion of incentives such as rent free periods on new lettings and most importantly, maintenance cost and property taxes the combination of which, account for around 40% of occupancy costs in the UK and are considerably higher than in other parts of the world."
Sadly, however, London’s prices are not matched by its quality of life. The city regularly tops the list as one of the worst cities in the Western world to live or work – especially for working parents.
To download the full report, please visit www.dtzresearch.com