Hong Kong outranked London’s West End for the most expensive average prices to rent an office in the world, according to a Cushman & Wakefield’s Office Space Across the World report.
The price of renting an office in Hong Kong amounted to US$27,432 per workstation per year by June 30, up 5.5%. In London, average prices became cheaper after falling 19% since 2016 to US$22,665 per workstation per year.
The UK’s decision to leave the European Union affected the prices of office rents after a depreciation of the pound sterling against the U.S. dollar. For Hong Kong, it ranked on top for the first time since 2013. The report attributed the increase in office rentals to Chinese institutional buyers’ leasing deals.
Some of them include China Huarong Asset Management and Bohai Bank, which have taken up space in the International Finance Centre. These companies also prefer to set up their offices in prime buildings, which allow them to bolster their global brand, according to John Siu Leung-fai, managing director at Cushman & Wakefield in Hong Kong.
Tokyo ranked as the third most expensive market in the world and the only Asian city to join the top 10 list. In the U.S., the cities of Fairfield, Connecticut, San Francisco, New York, and the Silicon Valley region made it to the list. Geneva and Paris comprised the two other European cities where office rents are expensive.
The report also listed Sydney’s office rental market as the ninth most expensive worldwide. Some landlords and enterprises in the city have offered an office space franchise opportunity for those that want to make a profit from high prices.
The demand from Chinese companies has largely driven Hong Kong to emerge on top of the global office rental market, while Brexit seemingly made it slightly affordable to rent offices in London.