A widespread fall in office demand led to falling prime rents for the first time last year according to a report made by global real estate adviser Cushman & Wakefield in its latest Office Space Across the World.
Tokyo ranked number one in the world for charging the highest prices for prime office space. Renting office space in Tokyo costs US$190 per square feet per year followed by London’s West End at US$161 per square feet and Hong Kong at a close third place with US$160 per square feet.
The biggest prime office rental decrease were reported in all the major cities of Asia Pacific including Singapore, Hong Kong and Tokyo recording falls of 45 percent, 35 percent and 21 percent respectively. Vietnam’s financial capital, Ho Chi Minh City, had the largest regional rental compression with a fall of -53 percent.
The strength of prime office rents are an indicator of office and development sector development- industries severely affected by the global financial crisis as companies either canceled or postponed expansion plans.
John Siu, general manager for Cushman & Wakefield in Hong Kong said in a statement: Demand for office space in Hong Kong’s key business districts started to pick up towards the end of 2009 and we are beginning to see signs of rental increases.
He added: We see 2010 as a year for tenants to take advantage of the rare current vacancies and significantly discounted rents before the market rebounds to the highs seen in early 2008.
The report predicts 2010 will be a better year for the industry as major economies slowly recover and demand for corporate office space climbs. Rental growth is already seen in London and Oslo although global rents are expected to decrease by the middle of the year.
This article was written by 2point6billion.com. 2point6billion.com is contributed to by the China accountants and business advisors at Dezan Shira & Associates.
Dezan Shira maintains accountants in Guangzhou , Shanghai, Beijing and many other cities around China. They also have offices throughout India and Vietnam.
Dezan Shira also contributes to the China business news website, China-Briefing.com.