Midtown Manhattan is inching its way up the global rankings, placing as the sixth most expensive office market in the world.
According to CBRE’s latest Global Prime Office Rent Survey, Midtown generated prime office rent of $144 per s/f.
The report tracked prime office rents, which CBRE described as rent minus local taxes and service charges for prime office properties.
Midtown rates represent a 4.8 percent increase from last year. Last June, the area placed ninth in the semi-annual survey with rents at $137 per s/f.
Asia dominated the rankings, with four areas in the continent placing in the top five.
Hong Kong’s Central District held on to the distinction of being the world’s most expensive office market. This is in spite of a nine percent drop in prime rents to $264 per s/f.
Beijing’s Finance Street ranked second with $179 per s/f, down from $188 per s/f last June. Other areas in the top five also posted declines. Rents in Hong Kong’s West Kowloon dropped from $179 per s/f to $163 per s/f. Beijing’s Central Business District, which stayed at fourth place, went from $182 per s/f to $156 per s/f.
Meanwhile, London’s West End continued its descent. The area posted prime rents of $146 per s/f, which represents a $116 drop from the survey last June.
In spite of the drastic drop in prices, Richard Barkham, CBRE’s global chief economist, expected a recovery in the global office market’s top tier.
“We expect the global economy to pick up momentum with growth boosted by fiscal expansion in the U.S.,” he said. “Growth was underpinned by positive monetary conditions in Europe and increased government spending in China, both of which are expected to continue.”
Global prime office rents in 2016 rose 2.3 percent, driven by a 3.7 percent increase in the EMEA (Europe, Middle East and Africa) region.
Four of the top five fastest-growing office markets were in Europe. The only exception was Downtown Chicago, which placed second due to a growth rate of 19.9 percent.