Australian office markets claim three top 50 spots

SYDNEY, Brisbane and now Perth are amongst the Top 50 most expensive office markets in the world, according to CB Richard Ellis' bi-annual Global Market Rents Survey.

SYDNEY, Brisbane and now Perth are amongst the Top 50 most expensive office markets in the world, according to CB Richard Ellis’ bi-annual Global Market Rents Survey.

 

The survey reveals each city has moved up the rankings in the past six month, led by Sydney.

 

Sydney was the major mover leapfrogging Brisbane to regain its mantle as the most expensive office market in Australia, at 38^th position up from 48^th six months ago.

 

Brisbane managed to move up one position from 47^th to 46^th and Perth moved up significantly in the rankings, from just outside the Top 50 to 41^st.

 

CBRE research and consulting executive director Kevin Stanley said interestingly, in this ranking, Perth is now one position above Calgary, Canada, a city of similar size to Perth and driven by similar boom economic conditions, although from oil and sand mining rather than minerals.

 

Meanwhile, Stanley said Perth was ranked highest on the fastest growing list at No.10, following 32.3% growth in occupancy costs in the 12 months to May 2008.

 

On the other hand, Sydney catapulted up the rankings from 62^nd position to 18^th with growth in occupancy costs of 23.2%. However, Brisbane fell in the rankings from 16^th place to 27^th.

 

Top 50 Most Expensive Office Markets as of May 2008

Rank	Market	$US/sq ft/annum	Aus $/sq m/annum
1	London (West End), England	299.54	3,532
2	Moscow, Russia	232.37	2,740
3	Tokyo (Inner Central), Japan	220.25	2,597
4	Mumbai, India	210.97	2,488
5	Tokyo (Outer Central), Japan	175.35	2,068
6	London (City), England	164.18	1,936
7	New Delhi, India	145.16	1,712
8	Paris, France	141.98	1,674
9	Singapore, Singapore	139.31	1,643
10	Dubai, United Arab Emirates	128.49	1,515
11	Hong Kong	126.79	1,495
12	Dublin, Ireland	126.60	1,493
13	New York Midtown, United States	103.43	1,220
14	Paris La Defense, France	103.20	1,217
15	Birmingham, England	100.38	1,184
16	Oslo, Norway	97.30	1,147
17	Madrid, Spain	96.64	1,140
18	Zurich, Switzerland	92.99	1,096
19	Luxembourg City, Luxembourg	92.78	1,094
20	Edinburgh, Scotland	92.43	1,090
21	Manchester, England	87.46	1,031
22	Stockholm, Sweden	86.69	1,022
23	Ho Chi Minh City, Vietnam	85.84	1,012
24	Milan, Italy	85.41	1,007
25	Abu Dhabi, United Arab Emirates	84.14	992
26	Frankfurt am Main, Germany	82.63	974
27	Bristol, England	81.49	961
28	Glasgow, Scotland	80.50	949
29	Geneva, Switzerland	78.43	925
30	Warsaw, Poland	76.55	903
31	Leeds, England	76.53	902
32	Rio de Janeiro, Brazil	74.60	880
33	Athens, Greece	73.79	870
34	Aberdeen, Scotland	72.55	856
35	São Paulo, Brazil	71.41	842
36	Seoul, South Korea	71.40	842
37	Rome, Italy	71.18	839
38	Sydney (Core), Australia	68.52	808
39	Shanghai (Pudong), China	68.45	807
40	Munich, Germany	67.55	797
41	Perth, Australia	66.58	785
42	Calgary, Canada (CBD)	66.27	781
43	Brussels, Belgium	64.77	764
44	Liverpool, England	64.60	762
45	Barcelona, Spain	64.43	760
46	Brisbane, Australia	63.32	747
47	Toronto, Canada (CBD)	62.44	736
48	Los Angeles (sub), United States	62.06	732
49	Jersey, England	61.46	725
50	Shanghai (Puxi), China	61.26	722

Source: CBRE Research

 

In addition to Australia, for the first time, four of the nine monitored Pacific region office markets – including Christchurch – made it into the Top 50 fastest growing list.

 

Stanley said occupancy costs in Christchurch grew by 16.7% in the 12 months to May 2008, ranking the market at 41^st fastest growing on our global list.

 

“This is up from a 127^th ranking in November 2007, when growth was just 2.9%.

 

“This is the biggest jump in rankings we’ve ever seen from a Pacific Region office market in the Global Market Rents fastest growing analyses,” he added.

 

But the good times are unlikely to last, Stanley said this points to an easing in growth in this market in the early part of 2008.

 

He said this is perhaps a sign of things to come for a market which has enjoyed staggering rental growth over the past three to four years.

 

Meanwhile, once again London’s West End is the world’s most expensive office market, whilst rapidly-rising Moscow climbed to second place, followed by Tokyo’s Inner Central Five Wards, Mumbai’s Nariman Point and Tokyo’s Outer Central Five Wards

 

CBRE’s global chief economist Dr. Raymond Torto said office occupancy costs are continuing to defy sluggish economic conditions and the credit crunch, as they rise faster than global inflation.

 

“These cost increases are dominated by emerging markets, caused by both supply and demand imbalance and the depreciation of the dollar relative to local currencies. In some of these emerging markets, Class A office space is seriously lacking,” he added.

 

Among the most expensive markets, Singapore and Dubai were newcomers to the top 10. Singapore ranked ninth with an occupancy cost of $US139.31 per sq ft, whilst Dubai debuted at number 10 with an occupancy cost of $US128.49 per sq ft.

 

In Asia Pacific, Ho Chi Minh City jumped from 45^th to 23^rd with occupancy costs rising to $US85.84 per sq ft. Occupancy costs in Tokyo’s Inner Central Five Wards rose to $US220.25 per sq ft, while Tokyo’s Outer Central Five Wards increased to $US175.35 per sq ft.

 

Australian Property Journal