The worlds most expensive office markets got a little cheaper this year. More than 130 cities worldwide had declines in rent expenses of an average 7.7% in the year ended September 30, CB Richard Ellis Group said in a report on Tuesday. Almost 50 cities reported declines of more than 10%. Rental costs fell about 30% in Midtown Manhattan, 53% in Singapore and 41% in central Hong Kong.
The places that went up the fastest and highest also came down the fastest and at greater depth, said Raymond Torto, Boston-based chief economist for CB Richard Ellis, the largest publicly traded broker. You party Saturday night and you pay for it on Sunday morning. Thats true across the globe.
The global recession and credit crisis are pushing down office rents as companies pare jobs. About 1.9 million job cuts have been announced worldwide this year.
Londons West End district retained its position as the worlds most expensive office location, Los Angeles-based CB Richard Ellis said. Offices there cost $184.85 a square foot. Thats down 26% from a year ago in US dollars or 18% in pounds. With the exception of CB Richard Elliss May survey, when London was passed by inner central Tokyo, the broker estimates that the West End has held the title of the worlds most expensive office site since 2001.
Inner central Tokyo came in second in the CB Richard Ellis survey, while outer central Tokyo came in third. Central Hong Kong was fourth and Moscow was fifth. A year ago the order was the West End, Moscow, central Hong Kong, inner central Tokyo and Mumbai. London and many Asian markets are showing signs of economic stability, Torto said. Most of the rent declines in those markets have probably already happened, he said.