London’s West End replaced central Hong Kong as the world’s most expensive office property market, broker CBRE Group Inc. said.
Occupancy costs, which include rent, local taxes and service charges, climbed 14 percent to $259 a square foot in the West End, the Los Angeles-based broker said in a statement today. Rates in central Hong Kong dropped 4.7 percent to $234 a square foot.
Rents are climbing in London’s West End as the U.K. economy improves and hedge funds compete for space in the district. Regulations protecting older buildings and preventing high-rise construction has created a shortage of office space in the West End, which includes Mayfair and St. James’s, fueling rent increases.
Occupancy costs in central Hong Kong, which has more empty workspace than other parts of the city, declined as companies were reluctant to commit to office moves, CBRE said.
Global occupancy costs climbed 2.2 percent during the year through September, led by the Americas, which climbed 4.6 percent, according to the statement.
Costs in the Asia Pacific region increased 3.2 percent. In Europe, the Middle East and Africa they rose 0.4 percent.
Beijing’s Finance Street and Central Business District were third and fourth, with costs of $197 and $190 a square foot, respectively. Hong Kong’s West Kowloon was fifth, at $170 a square foot.
North America was led by New York’s Midtown, which climbed 5.6 percent to $121 a square foot.