London’s West End Beats Hong Kong as Costliest Office SpaceNeil Callanan
London’s West End replaced Hong Kong as the world’s most expensive location to lease new office space per worker after rents in the Chinese city declined, broker DTZ said in a report today.
Companies spend the equivalent of $23,500 a year on office space for each employee in the central London neighborhood compared with $22,190 a year in Hong Kong and about $14,000 a year in 11th-ranked New York, according to a survey by the broker, a unit of Sydney-based UGL Ltd that operates in 52 countries and traces its roots back to 1784.
Costs per employee in Hong Kong slumped 12 percent after rents fell in the Central area as companies reduced space or moved to cheaper districts, researcher Karine Woodford said in the report. Costs fell in all U.S. cities last year as the labor market remained sluggish and companies used less space for each worker, the broker said.
London’s West End includes the districts of Mayfair and St. James’s, both of which are popular office locations for hedge funds including Moore Capital Management LLC and GLG Partners Inc. Brevan Howard Asset Management LLP, Europe’s second-largest hedge fund, may lease office space in St James’s, a person with knowledge of the matter said in October.
Prime office vacancy rates in Hong Kong’s Central rose to 4.9 percent at the end of November from 3.6 percent a year earlier, according to broker Jones Lang LaSalle Inc.
DTZ ranked 126 cities based on the occupancy cost for each employee including rent, taxes and maintenance costs. The cheapest was Surabaya in northwestern Indonesia at $1,610.