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Jones Lang LaSalle research reveals the world’s most expensive markets for office space, what industries dominate them and where the future lies
Prague, 29 January 2014 — Strong demand from niche financial and technology sectors is driving up the cost of office space in many cities around the globe, but a new analysis by Jones Lang LaSalle reveals the 12 premier office districts have been the biggest beneficiaries of the trend, witnessing higher competition by companies for space and driving rental prices to new highs.
JLL’s new list of the “World’s Most Expensive Office Areas” reflects a variety of global and regional economic trends and highlights the key factors companies consider when seeking premier office space. All 12 of the office districts are within the world’s most internationally connected and easily accessible cities, which are home to the greatest number of top global corporate headquarters, the world’s top talent and the highest net worth individuals.
Despite the upheavals in financial markets in recent years, the research points to the financial sector as the primary demand-driver in these top locations. A general lack of available space adds an aura of exclusivity in these supply-constrained areas, luring emerging companies in other sectors, as well retail, hospitality and tourism attractions.
JLL Director of Research Jeremy Kelly says the same set of Global Cities will continue to dominate the list in the years to come, although the order will change with sector-driver market conditions and the continued rise of the technology and mobile sectors. For example, Silicon Valley will continue to climb the list as tech-driven demand continues to push up rental rates. “With premium rents in the CBDs of a number of U.S. cities now increasing, we can expect to see additional U.S. markets ranking among the Most Expensive over the next 24 months,” he said.
The Most Expensive Office Areas for 2013 are:
1. St James’s, LONDON: GBP 125 per sq. ft. per year (USD 194 per sq. ft. per year, i.e. USD 2,088 per sqm per year)Home to world-leading hedge and sovereign wealth funds, and niche wealth and investment managers, St James’s personifies the West End’s unparalleled accessibility, luxury amenities and proximity to clients.2. Central, HONG KONG: HKD 105 per sq. ft. per month (USD 162 per sq. ft. per year, i.e. USD 1,744 per sqm per year)Complemented by first class hotels, luxury retail, excellent transport links and interconnecting walkways, Central is the location of choice for the city’s banking and finance community. 3. Finance Street, BEIJING: RMB 750 per square meter per month (USD 137 per sq. ft. per year, i.e. USD 1,475 per sqm per year)A Beijing submarket planned specifically for highest-tier financial institutions and major state-owned enterprises, Finance Street also attracts global investment banks and insurance companies. 4. Rue du Rhône, GENEVA: CHF 1,150 per square meter per year (USD 116 per sq. ft. per year, i.e. USD 1,249 per sqm per year)Rue du Rhône is Geneva’s prime location for private wealth management, banking and luxury retail brands. 5. Menlo Park, SILICON VALLEY, CALIFORNIA (USD 111 per sq. ft. per year, i.e. USD 1,195 per sqm per year)The epicenter of the technology universe, Sand Hill Road in Menlo Park is home to many venture capitalists. 6. Kremlin Area, MOSCOW: USD 1,150 per square meter per year (USD 107 per sq. ft. per year, i.e. USD 1,152 per sqm per year)Office space in Moscow’s Kremlin area is popular with Russian and international finance and legal tenants. New construction is tightly restricted, and that has helped further boost the value of office space in the area.7. Fifth Avenue, MIDTOWN MANHATTAN, NEW YORK: USD 104 per sq. ft. per year (i.e. USD 1,119 per sqm per year)Consistently ranked among the most expensive shopping streets in the world, Fifth Avenue is also home to numerous hedge funds looking for top-quality space in Midtown.8. Raffles Place/Marina Bay, SINGAPORE: SGD 11 per sq. ft. per month (USD 103 per sq. ft. per year, i.e. USD 1,109 per sqm per year)The heart of Singapore’s financial district is served by a world-class subway system and is a vibrant environment for work, living and play.
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