Hong Kong's Office Occupancy Costs Soar

by Mary Swire, Tax-News.com, Hong Kong

11 January 2006

Hong Kong has leaped up the global office occupancy costs league table and entered the top three most expensive office locations in the world, according to a recently published survey by DTZ, the global property adviser.

DTZ’s ninth annual Global Office Occupancy Costs survey is a guide to accommodation costs in major prime office locations covering 117 business districts in 46 countries worldwide. It found that the West End of London maintained its position as the world's most expensive office location with occupancy costs of US$18,740 per workstation per year. Washington DC climbed two spaces to become the second most expensive location with occupancy costs of US$15,370.

However, according to DTZ, the most notable finding was the rate at which office occupancy costs have increased in Hong Kong, posting a 61% increase over the last decade to US$15,000 per workstation per year. This resulted in the city climbing 13 places to become the world’s third most expensive location.

The report cites Hong Kong's positive business sentiment, especially among investment banks, who have displayed a greater willingness to pay for better quality offices, as one reason whdy office costs have soared in recent years. However, DTZ also blames the rising costs on a lack of new Grade A office space coming on to the market.

Dubai meanwhile, saw the second biggest increase in occupancy costs – up 50% to US$7,180 - triggering a rise of 38 places to claim the 37th position and surpassing Riyadh to become the third most expensive region in the Middle East, behind Doha and Kuwait City .

Paris, the City of London, Frankfurt, New York, Dublin, Central Tokyo and Luxembourg were the cities making up the rest of the top ten most expensive office locations.

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