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If you have $100M to spend on commercial real estate, the money will go a lot farther in the US than in Asia or Europe, according to global agent Knight Frank.
As part of its 2017 Global Cities report, Knight Frank has examined how much prime office space investors can acquire for $100M in the world’s leading cities.
Hong Kong is the most expensive city, where investors can expect to acquire a building of just 14k SF, which is equivalent to the size of an Olympic swimming pool, for $100M, corresponding to $7k/SF.
The major financial centres in Asia lead the rankings, with Tokyo the second most expensive city—where investors could purchase 33k SF for $100M—and Singapore in fifth place, where buyers would be able to acquire 50k SF. Paris and London complete the top five, at 41.5k SF and 45k SF, respectively.
Aside from New York, which is sixth in the rankings, investors can expect to get more for their money in the major US cities. In Washington, DC, investors would acquire 121k SF of prime office space for $100M, over double the space they could purchase in New York. In Boston (122k SF) Seattle (129k SF) and Austin (163k SF) investors would also find $100M goes considerably further than it would in the leading Asian cities.
Kuala Lumpur offers investors the best value; a prime office building of over 390k SF could be purchased for $100M.
Knight Frank head of capital markets for Asia Neil Brookes says the analysis shows good value in major US cities when compared to their Asian and European counterparts. Even in the more expensive, supply-constrained cities of New York and San Francisco, the differential in price per square foot versus Hong Kong and Tokyo looks attractive considering solid US economic prospects over coming years.
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