What cities worldwide have the most expensive office rent costs? Let’s look at the data.
Real estate markets are significantly driven forward by tech, according to recent reports.
Per the Premium Office Rent Tracker or PORT by Jones Lang LaSalle (JLL) which tracks the cost of leasing in major real estate districts globally, technology-rich cities are where most expensive offices for rent can be found.
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Leading the list of most expensive premium office rents worldwide is Central Hong Kong at $323 per sq. ft., followed by Midtown in New York costing $194 per sq. ft, the West End in London which would cost $193 per sq. ft., the Finance Street in Beijing at $190 per sq. ft., and Silicon Valley in California with a leasing cost of $159 per sq. ft.
Most notably, cities with high technological advancements rank higher on the list. These include most tech hubs in the US such as the New York Midtown ranking second, Silicon Valley taking the fifth place, San Francisco at rank 13, Boston at 16, as well as popular tech-rich areas in Europe including London at rank 3 and Stockholm at rank 20. From Asia, Beijing ranked 4 while Shenzhen got the eighth rank with Tokyo at ninth.
If these cities want to keep the financial benefits they get from the proliferation of the tech industries in their regions, they should be able to maintain their attractiveness for tech hubs. Otherwise, they risk being overtaken by more affordable regions.
Most affordable options
Europe holds the most affordable choices for office spaces. In fact, only one region from the European market is included in the Top 10 cities with most expensive office spaces and only four made it to the Top 20. That includes London’s West End at rank 3, London City at rank 14, Dubai, DIFC at rank 19 and Stockholm at rank 20.
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The most affordable regions for office spaces can be found in Moscow, Paris City, Zurich, Geneva, Frankfurt, Dublin, Istanbul, Milan, Madrid, Berlin, Paris La Defense, Amsterdam, Brussels, and Warsaw.
The strong presence of tech industries, however, is not the sole factor that attracts businesses to an area. Let’s take for example the city of Dublin in Ireland. In Europe, Dublin ranks 10th as one of the most expensive places to rent an office; globally, it ranks 34th. The cost of leasing an office in the city is only $72 per sq. ft. That is considering top cities such as Hong Kong have $323 per sq. ft as the average leasing cost. This affordability, along with the city’s inexpensive tax rate, a strong talent base with great English proficiency, an existing technological infrastructure, as well as an established record of corporates who’ve based in the city are good reasons why Dublin has been the target of more companies looking to set anchor.
“Dublin is therefore a dynamic and competitive city, and with a strong pipeline of new space forecast for the next 5 years, firms are likely to continue to be attracted here,” says Hannah Dwyer of JLL.
JLL (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.