According to the company, each of the five global cities expected to see the strongest rises in office space costs are to be found in the region, with multi-national operators increasingly aiming to expand their businesses in Asian economies like those of China and India.
Office space in Hong Kong is already the most expensive to rent anywhere in the world and the formerly British-Chinese city leads the way as far as dynamic Asian office markets are concerned, while Singapore, Bangalore, Beijing and Chennai are not all that far behind.
DTZ is expecting to see the typical cost of renting office space in the Asia Pacific rise by 3.7 per cent annually over the course of the next four years, with much of this growth to emerge from cities where rates are currently relatively low.
The price of renting grade-A offices in the leading Asian cities will be driven upward by a lack of ready supply and the sheer strength of demand among multinationals. As a result, cost growth over the next few years could well double the rates achieved in most European and North American markets.
Reflecting on the fastest-growing market in the region, DTZ’s head of Asia-Pacific research said: “Hong Kong is traditionally a volatile and cyclical market, responding very quickly to economic highs and lows.
“This is reflected in the fact that the prime rent took only one year to recover its ground in the wake of the financial crisis. We forecast that Hong Kong will continue to outpace other markets in the region, with the gap between it and other centres widening as occupancy costs increase.”
A report from Cushman & Wakefield covering similar subjects recently put Hong Kong at the top of its list of the world’s most expensive office space markets, surpassing London’s West End with strong growth in 2010.
Editor’s notes: In the Editor’s notes in this article about the world’s most expensive offices in 2022 it can be seen that the Central District in Hong Kong was the most expensive place in the world to rent office space that year with the best in class office space commanding USD 259 per square foot per year (gross effective).
Observing the 5 cities mentioned in this article, in the same year, Finance Street in Beijing was 2nd of the 5, commanding $167 per square foot per annum for prime office space.
Singapore was 3rd of the 5 at $110 per square foot, Bangalore (Bengaluru) was 4th of the 5 at $47 per square foot per annum and Chennai was 5th at $19 per square foot.