Strong demand from niche financial and technology sectors is driving up the cost of office space in many cities around the globe, but a new analysis by Jones Lang LaSalle reveals the 12 premier office districts have been the biggest beneficiaries of the trend, witnessing higher competition by companies for space and driving rent prices to new highs. JLL’s new list of the “World’s Most Expensive Office Areas” reflects a variety of global and regional economic trends and highlights the key factors companies consider when seeking premier office space. All 12 of the office districts are within the world’s most internationally connected and easily accessible cities, which are home to the greatest number of top global corporate headquarters, the world’s top talent and the highest net worth individuals.
Despite the upheavals in financial markets in recent years, the research points to the financial sector as the primary demand-driver in these top locations. A general lack of available space adds an aura of exclusivity in these supply-constrained areas, luring emerging companies in other sectors, as well retail, hospitality and tourism attractions.
The Most Expensive Office Areas for 2013 are:
1. St James’s, LONDON: GBP 125/ft² /year ($194 ft²/year) Home to world-leading hedge and sovereign wealth funds, and niche wealth and investment managers, St James’s personifies the West End’s unparalleled accessibility, luxury amenities and proximity to clients.
2. Central, HONG KONG: HKD 105 /ft²/ month ($162 /ft²/year) Complemented by first class hotels, luxury retail, excellent transport links and interconnecting walkways, Central is the location of choice for the city’s banking and finance community.
3. Finance Street, BEIJING: RMB 750/m²/month ($137/ ft²/year) A Beijing submarket planned specifically for highest-tier financial institutions and major state-owned enterprises, Finance Street also attracts global investment banks and insurance companies.
4. Rue du Rhône, GENEVA: CHF 1,150/m²/ year ($116/ft²/year) Rue du Rhône is Geneva’s prime location for private wealth management, banking and luxury retail brands.
5. Menlo Park, SILICON VALLEY, CALIFORNIA: USD 111/ft²/ year The epicenter of the technology universe, Sand Hill Road in Menlo Park is home to many venture capitalists.
6. Kremlin Area, MOSCOW: USD 1,150/m²/ year ($107/ft²/year) Office space in Moscow’s Kremlin area is popular with Russian and international finance and legal tenants. New construction is tightly restricted, and that has helped further boost the value of office space in the area.
7. Fifth Avenue, MIDTOWN MANHATTAN, NEW YORK: USD 104/ft²/year Consistently ranked among the most expensive shopping streets in the world, Fifth Avenue is also home to numerous hedge funds looking for top-quality space in Midtown.
8. Raffles Place/Marina Bay, SINGAPORE: SGD 11/ft²/month ($103 /ft²/year) The heart of Singapore’s financial district is served by a world-class subway system and is a vibrant environment for work, living and play.
9. Golden Triangle, Champs Elysées area, PARIS: EUR 800/m²/ year ($99/ft²/year) The center of Paris’s tourism and retailing is also an office hub for high-value-add businesses including international law firms and banks, and corporate tenants seeking accessible, high-quality buildings in close proximity to clients.
10. Marunouchi, TOKYO: JPY 28,600/tsubo/month ($98/ ft²/ year) Marunouchi, located on the west side of Tokyo Station, is a long-established office precinct where the lower floors of buildings typically house luxury retail, and higher floors are office space.
11. Uraniastrasse and Paradeplatz area, ZURICH: CHF 900/m²/ year ($91/ft²/year) Uraniastrasse and the area round the Paradeplatz in the core CBD of Zurich feature excellent accessibility and amenities, with office space heavily dominated by the banking sector and private wealth management. 12. Lujiazui, SHANGHAI: RMB16/m²/day ($87/ ft²/ year) Lujiazui was transformed from empty grassland to a bustling financial district in just 20 years and is now Shanghai’s largest CBD, home to 650 Chinese and international financial institutions.
About Jones Lang LaSalle Jones Lang LaSalle (NYSE:JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $3.9 billion, Jones Lang LaSalle operates in 70 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of 2.6 billion square feet and completed $63 billion in sales, acquisitions and finance transactions in 2012. Its investment management business, LaSalle Investment Management, has $46.3 billion of real estate assets under management.