Welcome to JSA Consultancy Services

A business consultancy, based in London, England, John Sacks' JSA Consultancy Services provides expert, in-depth, information advice and guidance as to how to exploit successfully the office furniture and interiors markets in Europe, North America, Australasia and Japan.

Global Occupancy Costs - Offices 2010

Friday 25 January 2013

London’s West End is once again the most expensive location in the world to occupy office space in, according to DTZ’s latest Global Occupancy Costs survey. Ranked fifth in last year’s survey, London’s West End has taken the number one spot, displacing Tokyo. It also jumps above Paris, Dubai and Hong Kong, which were ranked second, third and fourth. Paris and Dubai have now fallen from the top five to take sixth and eleventh place respectively, whilst Hong Kong stays put in fourth place.
The West End’s rise is due to it experiencing a short, sharp rental correction in 2008. This is in contrast with the other top-four locations, which saw their rents decline during the course of 2009. Overall, all the top ten global locations experienced either negative or neutral growth in occupancy costs during 2009.
The report, a guide to total office occupancy costs across 116 business districts in 47 countries and territories, is DTZ’s 13th annual survey and assesses the main components of occupancy costs in major office markets across the globe, ranking each location based on annual costs per workstation[1].
New entrants to the top ten
Emerging as new entrants within the global top ten were Zurich, Boston and Frankfurt, which ranked eighth, ninth and tenth respectively. The shift in position of these markets was due to more moderate rental decline in comparison to other locations.
Biggest fallers
A number of locations became much less expensive. Paris and Dubai dropped out of the top five in the global ranking, whilst Moscow became even more affordable after it shifted from 11th to 36th place.
However, the sharpest falls within the global ranking were recorded in those markets which have seen significant rental growth in recent years, most notably Singapore and Kyiv (Kiev), which both saw occupancy costs plummet by 51% year-on-year (in local currency).
Singapore felt the impact of the global economic crisis particularly badly, as weak occupier demand collided with a substantial amount of new supply to drag down rents and thus total occupancy costs. In Kyiv, demand for office space was severely impacted by the global recession, with take-up in 2009 less than half the volume recorded in 2008. Nevertheless, despite weak demand, the office market in Kyiv remains structurally undersupplied.

Karine Woodford, Head of Real Estate Strategy at DTZ, comments:
“In the current market, new occupiers will benefit from a wider and better pool of properties to choose from. As occupancy costs in prime locations become more affordable and space more available, a larger number of occupiers will be able to consider buildings in prime locations. Indeed, the silver lining for tenants actively looking for office space is that they may find rents quickly dropping to levels they cannot resist. With falling rents and more supply to choose from, the office market will offer tenants real value for money in the current climate, and we may see multi-national companies taking advantage of this shift and relocating their operations accordingly.”
Looking ahead to 2013
DTZ Research has started forecasting occupancy costs for the first time to assist clients in their longer term planning. Growth in occupancy costs is expected to be relatively muted over the 2010-13 forecast period, in contrast to the strong growth in occupancy costs experienced in recent years. This reflects the global economic outlook which is impacting on firms’ hiring decisions and consequent demand for office space, resulting in weak rental growth in the near term.
DTZ forecasts indicate that Asia Pacific will experience the strongest growth in occupancy costs over the next four years as the region’s economic growth is expected to continue to surpass that in Europe and the United States. The region features three of the world’s top five fastest growing markets in terms of occupancy costs per workstation – Hong Kong, Guangzhou and Bengaluru, which are expected to grow by 8.82%, 4.84% and 4.36% respectively between now and 2013 – with Hong Kong predicted to emerge as the most expensive location in Asia-Pacific, as supply constraints drive increases in rents.
London’s West End market is, however, expected to remain the world’s most expensive location in coming years, with Hong Kong, Tokyo, Washington D.C. and Paris (CBD) rounding out the top five by 2013. The steepest declines in occupancy costs over the forecast period (2010 – 2013) are expected in Singapore (-1.8%), Chennai (-1.4%) and Glasgow (-0.6%), with the declines being anticipated during the first half of that period.
Tony McGough, Global Head of Forecasts at DTZ, comments:
“While costs are forecast to be broadly stable on average, there is significant divergence within the regions. In Europe, most markets continue to see falling or stable costs; however the volatile London City market is expected to see a strong bounce back in occupier costs during 2010 due to a lack of supply and a returning demand for space running counter to the broader European trend. Singapore continues to be impacted from a huge influx of new supply leading to further rental declines, and thus lower occupancy costs.”

Subscribe to our News Page

Enter your email here and we will tell you when this page is updated.



moreLatest News

Wednesday 4 April 2018 Humanscale Launches First-Ever Task Chair Made with Recycled Fishing Nets

Smart Ocean Task Chair Developed with Bureo Incorporates Almost 2 lbs. of Plastic Pollution &

Thursday 29 March 2018 3 Things Steelcase Inc. Management Wants You to Know

In the fourth quarter of fiscal 2018 (year ended February 23, 2018), office-furniture manufacture

Thursday 8 March 2018 Herman Miller International exec to retire

ZEELAND — A member of the executive team at Herman Miller Inc. has announced

Tuesday 27 February 2018 Naughtone Placed No. 22 in the Sunday Times Lloyds SME Export Track 100

naughtone, a furniture design and manufacturing company based in Knaresborough, North Yorkshire,

Contact Us

JSA Consultancy Services
4-5 Gray’s Inn Square, Gray’s Inn,
London, WC1R 5AH, England

+44 (0) 20 7688 1928