Thinking of where to launch your first office space? Figures from Knight Frank’s Global Real Estate Markets Annual Review & Outlook 2011 rank Lagos 11th in the list of world’s most expensive prime office rents with $78.04 per square foot per year. The former capital of Nigeria and the business hub of the country dropped one place from its 2010 position.
Meanwhile, Central Hong Kong overtook London’s West End as the most expensive location to rent office space in the world in 2011. The report says, Hong Kong’s rise to the top of the ranking is a result of rapid rental growth in the first half of 2011.
According to the report:
“Other hotspots for office rental growth in 2011 included the US markets San Francisco, where demand from the technology sector helped to push Class A rents up by 24% to US$37.75 per sq ft p.a. (c.UK£24.42 per sq ft p.a.), and Manhattan, which saw Class A rents increase by 12% to US$64.36 per sq ft p.a. (c.UK£41.64 per sq ft p.a.).
“There is a mixed outlook for our top 50 markets in 2012, with rents forecast to rise in 18 of them, remain broadly flat in 21, but to fall in 11 locations. Among the markets where rents are most clearly under downward pressure are those in European economies affected by the sovereign debt crisis, including Madrid, and Asian markets where availability is high, such as Ho Chi Minh City.”
Matthew Colbourne, senior international research analyst, commented “Office occupiers remain cautious in many international markets, particularly with concerns over the strength of the global economy, and the future of the Eurozone, resurfacing in recent months. The pace of prime office rental growth in Europe slowed significantly in the second half of 2011, with rents remaining essentially flat in markets such as London (West End) and Frankfurt. Asian cities are experiencing mixed fortunes; while confidence remains high in mainland China, falling office rents were observed in late 2011 in markets dependent on demand from international financial occupiers, such as Hong Kong and Singapore.”
Andrew Bugg, head of global corporate services, EMEA, said “Business strategies continue to be focussed on increased efficiencies and cost savings, especially with increased M&A activity, whilst the workplace follows its trend towards activity-based working in response to the arrival of Generation Y in the workforce. Occupiers continue to seek consolidation opportunities and flexibility on commitment given the changes in structure and reduced availability of high quality space. Major decisions may be on hold, but the perceived importance of London versus the Eurozone should lead to certainty on strategy in European markets.” Click here to read the full listing