<p>Tokyo’s Inner Central, which was at number 1 in May this year has slipped to second place, followed by that city’s Outer Central market. Hong Kong’s Central Business District (CBD) and Moscow are fourth and fifth respectively in the CBRE report, which tracks office occupancy costs in nearly 180 cities around the globe. <br /><br />Anshuman Magazine, Chairman & Managing Director, CB Richard Ellis South Asia says, “While Mumbai continues to remain in the top ten (having dropped from sixth to seventh position), Delhi has re-joined the top 10 ranking (moving up from 12th to 10th position) of most expensive office markets, after two years. <br /><br />“Although the rentals in the Delhi CBD have remained stable for the past six months, it has moved up to the 10th position primarily due to other global cities declining significantly in office rentals. <br /><br />“From the third quarter of 2009 onwards, we have seen corporates coming back into the market and office space take-up has improved. To reduce office occupancy costs further and facilitate more supply of office space we need to urgently improve our infrastructure and amenities.” <br /><br />Decline in occupancy costs<br /><br />Office markets worldwide are experiencing declines in prime office occupancy costs. The year-over-year change in prime office occupancy costs of the 179 markets monitored revealed an average drop of 7.7 per cent worldwide over the 12-month period ending September 30, 2009 (in local currency and on an un-weighted average basis). <br /><br />The majority of markets – 131 markets in total – experienced a year-over-year decline including nearly 50 which saw rents tumble by double-digit percentage-points. <br /><br />Many of the world’s bellwether financial centres are at the top of the list of fastest changing markets, including Hong Kong Central CBD(-40.7 per cent) and New York, Midtown(-29.7 per cent) along with emerging markets such as Ho Chi Minh City (-45.4 per cent) and Abu Dhabi (-38.6 per cent). Kiev led the world with the largest year-over-year decrease in office occupancy costs, falling 64.6 per cent from year-ago levels. “While there are signs that commercial real estate values are stabilising in some markets in Asia and parts of London, underlying property fundamentals are still weak,” said Raymond Torto, CBRE’s Global Chief Economist. <br /><br />“However the office market may be on the cusp of moving from intensive care to the stabilisation stage - the first step to getting back to good health.” <br /><br />Forty-one markets experienced positive growth. Aberdeen, Scotland and Rio de Janeiro, Brazil both grew by more than 10 per cent as not all markets have been as affected by the decline in global demand and demand for office space has proven resilient in some areas due to the local market dynamics. <br /><br />Asia-Pacific <br /><br />Tokyo (Inner Central) was Asia’s most expensive market with an occupancy cost of $172 per sq. ft. while that city’s Outer Circle market was second with occupancy costs of $139 per sq. ft. Hong Kong (CBD) follows with occupancy costs of $138 per sq. ft. Mumbai and New Delhi were the other two Asia-Pacific markets in the world’s top 10 most expensive cities roster. For the Asia Pacific region, the office markets that experienced the largest decreases include Singapore (-53.4%), Ho Chi Minh City (-45.4%), as well Hong Kong which declined over 30 per cent in the past year. The Asia-Pacific region had 17 cities with double-digit declines in office occupancy costs. <br /><br />Europe<br /><br />London’s West End was the world’s most expensive office market at $185 per sq. ft. Moscow was second in Europe with occupancy costs at $132 per sq. ft. Dubai, Paris and the City of London all were in the top ten most expensive markets. Kiev led the world with the largest year-over-year decrease in office occupancy costs, falling 64.6 per cent from year-ago levels. Other markets in Europe that are experiencing the largest decreases include Moscow, Oslo, Warsaw and Dublin. <br /><br />The EMEA region had 17 cities with double-digit declines in office occupancy costs. <br />Americas<br /><br />Two cities in Brazil, Rio de Janeiro and São Paolo, have supplanted New York’s Midtown as the most expensive office location in the Americas. Rio de Janeiro’s occupancy costs of $87 per sq. ft., was good for twelfth place on the global list, while São Paulo came in at 16th globally with occupancy averaging $82 per sq. ft. New York’s Midtown’s market has dropped to third in the Americas and 24th globally with occupancy costs of $69 per sq. ft. <br />Boston’s CBD led the Americas, with a decline of 33.9 per cent year-over-year, followed by New York’s Downtown and Midtown markets. <br /><br />Fifteen markets in North America posted double-digit declines.</p>
<p>Tokyo’s Inner Central, which was at number 1 in May this year has slipped to second place, followed by that city’s Outer Central market. Hong Kong’s Central Business District (CBD) and Moscow are fourth and fifth respectively in the CBRE report, which tracks office occupancy costs in nearly 180 cities around the globe. <br /><br />Anshuman Magazine, Chairman & Managing Director, CB Richard Ellis South Asia says, “While Mumbai continues to remain in the top ten (having dropped from sixth to seventh position), Delhi has re-joined the top 10 ranking (moving up from 12th to 10th position) of most expensive office markets, after two years. <br /><br />“Although the rentals in the Delhi CBD have remained stable for the past six months, it has moved up to the 10th position primarily due to other global cities declining significantly in office rentals. <br /><br />“From the third quarter of 2009 onwards, we have seen corporates coming back into the market and office space take-up has improved. To reduce office occupancy costs further and facilitate more supply of office space we need to urgently improve our infrastructure and amenities.” <br /><br />Decline in occupancy costs<br /><br />Office markets worldwide are experiencing declines in prime office occupancy costs. The year-over-year change in prime office occupancy costs of the 179 markets monitored revealed an average drop of 7.7 per cent worldwide over the 12-month period ending September 30, 2009 (in local currency and on an un-weighted average basis). <br /><br />The majority of markets – 131 markets in total – experienced a year-over-year decline including nearly 50 which saw rents tumble by double-digit percentage-points. <br /><br />Many of the world’s bellwether financial centres are at the top of the list of fastest changing markets, including Hong Kong Central CBD(-40.7 per cent) and New York, Midtown(-29.7 per cent) along with emerging markets such as Ho Chi Minh City (-45.4 per cent) and Abu Dhabi (-38.6 per cent). Kiev led the world with the largest year-over-year decrease in office occupancy costs, falling 64.6 per cent from year-ago levels. “While there are signs that commercial real estate values are stabilising in some markets in Asia and parts of London, underlying property fundamentals are still weak,” said Raymond Torto, CBRE’s Global Chief Economist. <br /><br />“However the office market may be on the cusp of moving from intensive care to the stabilisation stage - the first step to getting back to good health.” <br /><br />Forty-one markets experienced positive growth. Aberdeen, Scotland and Rio de Janeiro, Brazil both grew by more than 10 per cent as not all markets have been as affected by the decline in global demand and demand for office space has proven resilient in some areas due to the local market dynamics. <br /><br />Asia-Pacific <br /><br />Tokyo (Inner Central) was Asia’s most expensive market with an occupancy cost of $172 per sq. ft. while that city’s Outer Circle market was second with occupancy costs of $139 per sq. ft. Hong Kong (CBD) follows with occupancy costs of $138 per sq. ft. Mumbai and New Delhi were the other two Asia-Pacific markets in the world’s top 10 most expensive cities roster. For the Asia Pacific region, the office markets that experienced the largest decreases include Singapore (-53.4%), Ho Chi Minh City (-45.4%), as well Hong Kong which declined over 30 per cent in the past year. The Asia-Pacific region had 17 cities with double-digit declines in office occupancy costs. <br /><br />Europe<br /><br />London’s West End was the world’s most expensive office market at $185 per sq. ft. Moscow was second in Europe with occupancy costs at $132 per sq. ft. Dubai, Paris and the City of London all were in the top ten most expensive markets. Kiev led the world with the largest year-over-year decrease in office occupancy costs, falling 64.6 per cent from year-ago levels. Other markets in Europe that are experiencing the largest decreases include Moscow, Oslo, Warsaw and Dublin. <br /><br />The EMEA region had 17 cities with double-digit declines in office occupancy costs. <br />Americas<br /><br />Two cities in Brazil, Rio de Janeiro and São Paolo, have supplanted New York’s Midtown as the most expensive office location in the Americas. Rio de Janeiro’s occupancy costs of $87 per sq. ft., was good for twelfth place on the global list, while São Paulo came in at 16th globally with occupancy averaging $82 per sq. ft. New York’s Midtown’s market has dropped to third in the Americas and 24th globally with occupancy costs of $69 per sq. ft. <br />Boston’s CBD led the Americas, with a decline of 33.9 per cent year-over-year, followed by New York’s Downtown and Midtown markets. <br /><br />Fifteen markets in North America posted double-digit declines.</p>
