London regained its premier position as the world’s priciest city to rent office space this year, beating out Hong Kong’s central business district after being knocked down the ranks, thanks to the 2008 financial crisis. Though it never lost its ground as Europe’s most coveted location, London is getting its groove back globally speaking as Asia's growth eases a bit, and local economic confidence seems to be in rebound mode.
“As a truly global city, London’s appeal continues unabated,” said Digby Flower, chief of London markets at international property broker Cushman & Wakefield, which recently issued its annual report on the cost of office space worldwide. “Equally importantly, we expect rents to grow further as we get into recovery mode [following the 2011-12 recession].”
The report outlines the cost of office rental in 63 business districts across the globe. And as the map depicts above – the usual locations in Europe, the Americas and the Asia-Pacific region dominate, with rents topping $1,000, $2,000 and, in London’s case, $3,000 per square meter of office space per year.
Of the top-ranking business districts, Rio de Janiero’s Zon Sul made the biggest jump, from No. 8 last year to No. 3. Tokyo moved in the other direction, as Japan grapples with recession, moving from No. 3 last year to No. 5. New York’s Midtown district saw a slight decline in its ranking, from No. 7 to No. 8.
The bottom of the list is dominated by Eastern European financial centers in Bulgaria, Serbia, Croatia, Estonia, Latvia and Lithuania. Amman, Jordan, is the third Middle East city on the list, but barely so. Quito, Ecuador, and Lima, Peru, also edge in at the bottom.
The cheapest place on the list to rent an office? Sandton, an upscale suburb of Johannesburg, South Africa.