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Office rents in top world markets soar: report
August 22, 2007 / 10:34 PM / 10 years ago

Office rents in top world markets soar: report

NEW YORK (Reuters) - Asking rents for prime office space in 10 major global markets rose in the year ended June 30, with the London’s West End posting the biggest rise and its greatest increase in 19 years, CB Richard Ellis Group Inc(CBG.N) said on Wednesday.

<p>View of downtown and the former World Trade Center site in New York, May 11, 2006. Asking rents for prime office space in 10 major global markets rose in the year ended June 30, with the London's West End posting the biggest rise and its greatest increase in 19 years, CB Richard Ellis Group Inc CBG.N said on Wednesday. Although it is the most expensive U.S. office market, New York looked like a bargain with average asking rent at $63.56 per square foot, up 34.4 percent, the second greatest jump of the pack. REUTERS/Chip East</p>

Five of the markets saw rents spike more than 20 percent, while vacancy rates declined in all and remained in the single digits, the world’s largest real estate services company said.

“Rent increases of more than 20 percent in bellwether cities like London, New York and others significantly underscore the continued strength of the global office market,” said Ward Caswell, CB Richard Ellis U.S. director of research, said in a statement.

The West End of London saw the greatest leap in asking rent, up 37.1 percent to an average of 120 pounds sterling, or $243.73 per square foot. Currency conversions were done on August 1.

Tokyo posted the second-highest asking rent, at 690,000 yen per tsubo, or $163 per square foot. Rents rose 16 percent.

Paris asking rent rose 13.7 percent to 771 euros per square meter or $97.92 per square foot. Hong Kong rents rose 24 percent to HK$717.60 per square foot, or $91.65 per square foot.

Although it is the most expensive U.S. office market, New York looked like a bargain with average asking rent at $63.56 per square foot, up 34.4 percent, the second greatest jump of the pack.

Madrid posted the third-highest increase, rising about 24.5 percent to 456 euros per square meter, or $57.90 per square foot.

Sydney’s average asking rent rose 8 percent to AUS $641 per square meter, or $50.94 per square foot.

Washington office rents rose just 8.5 percent to $48.31 per square foot, followed by Los Angeles at $32.16 per square foot but rising 20 percent.

Toronto rounded out the markets at CAN $28.82, or $27.29 per square foot, up 3 percent.

(Reporting by Ilaina Jonas)

1 tsubo = 35.6 sq. feet

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