These Are The Top 6 Premium Office Markets In The World
Companies in the world’s most expensive office markets are paying upward of $130/SF per year, a pretty penny that only a fraction of corporations can afford. But these firms are paying a premium for more than mere office space. They’re buying into the world’s most influential and connected cities that house some of the largest corporations and deepest talent pools. Using its Premium Office Rent Tracker to compare premium office costs internationally, JLL found these six markets are the top premium markets in the world.
(All stats as of Q4 2016)
Vacancy Rate (Grade-A space): 6.5%
Though demand for premium office space in the world’s top markets continues to outpace supply, the segment may be maturing in its cycle. Shanghai's global ranking has declined as it continues to be outpaced by growing demand in New York and Tokyo. However, occupancy rates in this market have remained stable year-to-year, keeping rents at levels that keep it in the top six.
Vacancy Rate (Grade-A Space): 1.9%
Major commitments and a jump in leasing activity have pushed Tokyo up in the ranks. Japan's capital experienced a rise in year-to-year occupancy levels in 2016, and JLL predicts the market could soon outpace Beijing in costs.
Vacancy Rate (Grade-A Space): 1.4%
Beijing dropped one place in ranking last year, falling behind New York as the fourth most expensive office market in the world. Premium rents have remained stable in the market, as have its occupancy rates compared to 2015.
3. New York (Midtown)
Vacancy Rate (All Space): 8.7%
Tech businesses are migrating to New York and originating in the city, absorbing premium office space normally tapped by private banking, corporate and investment banking firms. The market’s occupancy rates jumped in Q4 last year, and should London face any further headwinds, New York is poised to grab its position as the second-highest-ranking premium office market in the world.
2. London (West End)
Vacancy Rate (All Space): 4%
London has been facing pressures as of late, particularly following political and financial volatility spurred by the Brexit vote last year. Occupancy rates in London declined last year as a result, and should the city take any more hits, it could drop to third place, JLL reports.
1. Hong Kong
Vacancy Rate (Grade-A Space): 1.5%
Hong Kong remains the top premium market on JLL’s list and is seen as a “globally fluent” business hub. Occupancy rates continued to climb in this market in Q4 thanks in large part to a migration of Chinese mainland firms relocating to the area, coupled with diminishing supply.