Hong Kong’s ‘Nosebleed’ Office-Tower Values Beat Manhattan
Workspace at “nose bleed” level in skyscrapers, which commands the highest rent, is selling for $69,222 a square meter in Hong Kong compared with $42,283 in second-ranked Tokyo and $25,740 in Manhattan, the London-based broker said in a report today. Five of the 10 most expensive cities are in the Asia-Pacific region, according to the report.
“Island-based cities tend to embrace the tower to maximize space,” James Roberts, the firm’s head of commercial research, wrote in the report. “While Hong Kong and Tokyo are too far ahead to lose first and second place, I see some competition among Manhattan, London and Singapore in the coming year.”
Rents in Central, Hong Kong’s main business district, will rise 15 percent this year as demand from banks increases, Credit Suisse Group AG analysts led by Joyce Kwock forecast in a January report.
Rents outside the area are climbing faster as financial-services companies seek alternative locations to the city’s Central district, which has the world’s second-most expensive office occupancy cost, according to CBRE Group Inc. Higher rents usually result in rising property values.
In Manhattan, financial companies are reducing their space needs or cutting costs and technology and media firms are favoring older buildings, limiting rent gains. JPMorgan Chase & Co., the biggest U.S. lender, is moving about 2,000 employees to Brooklyn’s MetroTech Center after reviewing its property holdings, a person with direct knowledge of the plan said.
Singapore, the world’s costliest city to live in, and London are the next most expensive locations -- with skyscrapers valued at $23,810 and $23,767 a square meter respectively -- and may swap places next year, Knight Frank’s Roberts said in the statement.
Office rents in Singapore rose 4.2 percent in the three months to Dec. 31, the biggest increase in the Asia-Pacific region, according to broker Jones Lang LaSalle Inc.
London has “renewed confidence thanks to better than expected economic growth and rising rents in the office market,” Roberts said. “Given the economic uncertainty in emerging markets, in 2014 we will probably see some of the Asian cities slide down the table.”
Sydney, Beijing, Shanghai, San Francisco and Moscow rounded out the top 10, with values ranging from $18,392 to $13,333.
In the same report, Knight Frank said prime residential-property values in Jakarta rose 37.7 percent last year, the most in the world, followed by Auckland at 28.8 percent and Bali at 22 percent. Dublin, in fifth place, had the highest increase in Europe after prices for the best properties rose 17.5 percent in 2013. Los Angeles ranked first in the U.S. with a 14 percent gain.
New York will overtake London as the most important city for the world’s wealthiest people by 2023, according to Knight Frank. It defines the world’s wealthiest as those with $30 million or more in net assets excluding their main home.
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