Hong Kong Office Rents Now Double London’s

Hong Kong office space increased in cost by more than a third in 2010, with tenants now having to pay nearly double the cost of office space in London according to figures just released by Colliers International Research.  Prime office space in Hong Kong now costs $2066.35 per square metre compared with $1523.31 a year ago.

Office space in the West End of London is the next most expensive at 1431.82 per square metre.  Colliers tracked a total of 20 cities, and all of them recorded higher rents in the second half of 2010.  The level of office construction is highest in the Asia-Pacific region and is being driven by growth in India, China, Indonesia and the Philippines.

The large majority of regions showed increasing signs that the worst of the recession is now over with tenants returning to the market, and Colliers expects this growth to continue although the recent increase in energy prices and the unrest in the Middle East and North Africa could affect demand.  The price of crude oil has risen by 30% in the last six months; however its full effect won’t become apparent until the second half of this year.

Office space is in particularly short supply in central London and is expected to cause rents to increase sharply over the next two years, and London also recorded the most sales in 2010 at $15.3 billion.  Tokyo was second and $11.7 billion with New York recording sales of $8.5 billion.  The global economy is gradually strengthening and the financial markets are improving although certain markets are still being affected by debt.