Feb. 25 (Bloomberg) -- London lost its ranking as the world’s most expensive city for offices in 2008, supplanted by Hong Kong and Tokyo for the first time in nine years.

Falling rents in the U.K. capital combined with the pound weakening against the euro brought occupancy costs for prime offices in London’s West End down 23 percent to 1,403 euros ($1,783) per square meter annually, New York-based property broker Cushman & Wakefield Inc. said in a report today. That compares with 1,743 euros per square meter in Hong Kong and 1,649 euros in Tokyo.

“The fall in rents and weak U.K. currency means that for overseas companies, London is now more affordable than it has been in years,” Cushman said.

The global financial crisis pushed rents lower in 16 percent of the world’s biggest cities as financial companies fired workers and cut back on the space they lease, Cushman said. Worldwide mortgage-related losses and asset write downs total more than $1.1 trillion.

London “has now felt the full impact of the credit and banking crisis,” Cushman said.

Costs fell 4 percent in Hong Kong compared with a year earlier and declined 19 percent in Tokyo.

“There seems little doubt that rents will continue to fall over 2009, perhaps at a faster rate than before,” said John Siu, general manager, Cushman & Wakefield Hong Kong.

Cushman & Wakefield surveyed 202 locations in 57 countries. Rents climbed 3 percent globally, the smallest increase since 2004, the broker said. Rent accounts for the bulk of occupancy costs, which also include service charges and property taxes.

Moscow, Dubai, Mumbai, Paris, Damascus, Singapore and midtown Manhattan rounded out the 10 most expensive locations for offices.

Dublin fell to 15th, ranking it out of the top 10 for the first time in three years.

To contact the reporter on this story: Peter Woodifield in Edinburgh at pwoodifield@bloomberg.net.

Last Updated: February 24, 2009 19:01 EST