London’s West End overtakes Tokyo as world’s most expensive office market

Office space in the West End rises to £85 per sq ft in 2010 and has since risen to £90 per sq ft

Article posted: 10 May 2011

Newly-released figures from Knight Frank show that office space in London’s West End overtook Tokyo as the most expensive in the world during 2010. The figures are revealed by Knight Frank’s Global Real Estate Markets Annual Review & Outlook 2011, which reviews current conditions in commercial property markets across the globe and surveys office rental levels in 105 international markets.

The West End had dropped to second place in the rental rankings in the 2009 and 2010 surveys, as a result of falling rents in the aftermath of the Lehman Brothers collapse, but this year's report sees it regain top position on the back of a revival in occupier demand which has fuelled strong rental growth.

Rents for prime office space in the West End of London reached £85 per sq ft per annum at the close of 2010, a 31% jump from the start of the year. Since the end of last year, West End office rents have risen further, to £90 per sq ft due to a further reduction in supply and growing interest from Media firms, such as NBC, Google and Apple.

In contrast, Tokyo has seen office rents fall as a result of rising vacancy rates and a relatively weak economic outlook, even prior to the recent earthquake. The Hong Kong market has risen to third place in the rankings, having seen a rapid recovery in rental values, triggered by increased competition among occupiers for a limited amount of available Grade A space. The top ten is completed by Moscow, Paris, Singapore, London (City), Sydney, Mumbai and Lagos; a mixture of established global financial centres and emerging office markets.

For breaking news relating to office space in Central London follow us on http://twitter.com/officespacenews

Posted by Dan