APAC office prices up 1.7% in 2018

Hong Kong prime offices are the world's most expensive at US$306.57 per sqft per annum.

Office occupancy cost in the Asia Pacific region grew 1.7% YoY in Q1 of 2018 from 1.2% in Q1 of 2017. Together with office prices from Europe, the Middle East, and Africa (EMEA) countries, APAC pushed the rate of global office prices 2.4% YoY in 2018, a CBRE research found.

With prime offices costing US$306.57 per sqft per annum, Central Hong Kong defended its spot for the second consecutive year as the world’s most expensive office location. Kowloon stayed as the fourth priciest office location.

Aside from the banking and finance from Mainland China firms that mainly drives demand in the area, CBRE noted that flexible-space operators have also been active in Hong Kong’s overall market.

Also read: Singapore's flexible office market jumped 17%

China’s Beijing with prime office rates valued at US$189.44 per sqft per annum jumped from sixth to third place in this year’s list of most expensive office locations. Amidst space demand from finance, technology, and flexible space operators, CBRE thinks that international demand will also step up due to ongoing Chinese financial reforms.

Marunouchi and Otemachi offices (US$171.41 per sqft per annum) in Tokyo slipped one step to eighth place as new supplies pushed more vacancies despite the very tight market condition. Meanwhile, Connaught place (US$153.26) which is New Delhi’s central business district (CBD) remained as ninth placer due to stable vacancy, rents, and absorption.

“The dominant trend among the top-20 markets with rising prime occupancy costs is strong demand from the finance, technology, and e-commerce sectors,” CBRE said.

Other APAC prime city office spaces also made it to the top 50 including those from Shanghai, Seoul, Sydney, Singapore, Shenzhen, Mumbai, Taipei, and Ho Chi Minh.