Bangkok--22 Jun--CB Richard Ellis
Occupation costs for prime office space continue to rise in most global markets, particularly in Asia, while London’s West End remains by far the world’s most highly priced business district, according to international property consultants CB Richard Ellis.
Bangkok has risen to 24 places in the CB Richard Ellis Global Market Rents report. Bangkok is now ranked 141st of 173 cities surveyed on office occupation costs, up 24 places from August 2005.
Of the 173 markets surveyed, occupancy costs increased in 119 and decreased in only 24 in the last year. Much of the global rental growth can be seen in Asia, led by India and China, the world’s fastest growing major economies. With a 69% increase in occupation costs in the last 12 months, Mumbai’s (India) Nariman Point submarket has seen the greatest rent appreciation of the locations surveyed. While London’s West End, at Baht 6,369 /sq m/month (US$ 167), remains the most expensive office market in the world, North American markets including New York, Washington, D.C., Toronto and Calgary remain a relative bargain.
Asia Pacific
At Baht 3,185 (US$ 83) (occupancy cost in /sq m/month used throughout release), Mumbai ‘s Nariman Point broke into the top 10 most expensive markets. Bangkok CBD grade A office rents rose dramatically by 19.8% over the past 12 months. Average achieved rents have risen to Baht 704 (US$18.5) in the same area.
Elsewhere in Asia, Hong Kong occupancy costs jumped 50% to Baht 3,493 (US$ 92) over the last year. Tokyo remains one of the world’s most expensive office markets. Occupancy costs in the Inner Central Five Wards, ranked 2nd, increased 8% to Baht 4,451 (US$ 117), while Outer Central costs, the 4th highest, increased 3% to Baht 4,042 (US$ 106). At Baht 1,439 (US$ 38) and ranked 43rd, Singapore returned to the top 50 after a three-year absence.
In the Pacific Region, Sydney remains the only market to make it into the top 50, coming in at 46th. But like the rest of the world, office occupancy costs are rising across most of the Pacific Region, albeit at very different rates.
Europe
European cities continue to dominate the top 50 list of the most expensive office markets, led by London’s West End. Occupancy costs in that district—up 10% since last year—are 30% higher than the next most expensive submarket, Tokyo’s Inner Central. London City has seen occupancy costs rise to Baht 4,348 (US$ 114), a 7% increase in the last 12 months. Of the larger markets, Madrid witnessed the most significant rise in occupation costs, which increased 12% to Baht 1,847 (US$ 48).
Americas
Despite rental growth in many North American markets, only four—Midtown Manhattan, Washington, D.C., Toronto and Calgary—are in the current top 50. Washington, D.C., continues to benefit from a steady federal expansion, which is fueling a solid demand for space. Occupancy in Midtown Manhattan is still the most expensive in the United States at Baht 1,882 (US$ 49). Rio de Janeiro is at Baht 1,748 (US$ 46) and ranked 30th, while S?o Paulo, at Baht 1,439 (US$ 38) and ranked 42nd, returned to the top 50 after dropping off the list four years ago.
CB Richard Ellis believes that although Bangkok rents continue to rise, the Thai office market offers good value to tenants. London’s West End is nine times more expensive, Hong Kong is five times, and Singapore rents are double those of Bangkok.
Source: Global Market Rents May 06 by CB Richard Ellis Research
Note: US$1 = Baht 38.17
Notes to Editors
1. Global Market Rents is a survey of office occupation costs in 173 cities worldwide.
2. Unless otherwise stated the figures given in this release refer to occupation cost. This represents rent, plus local taxes and service charges. The occupation cost figures have also been adjusted to reflect different measurement practices from market to market.
3. Prior editions of the Global Market Rents were published in January and August. Starting with this edition, we are publishing in May and November. Due to the publication schedule differences readers should be wary of attempting to construct long time series using prior editions or press releases.
4. The full top 50 locations as of May 2006 are as follows:
About CB Richard Ellis
CB Richard Ellis Group, Inc. (NYSE:CBG), a FORTUNE 1000 company headquartered in Los Angeles, is the world's largest commercial real estate services firm (in terms of 2005 revenue). The Company serves real estate owners, investors and occupiers through more than 350 offices (including affiliate and partner offices) worldwide.
CB Richard Ellis established an office in Bangkok in 1988 and in Phuket in 2004. CB Richard Ellis (Thailand) Co., Ltd. has grown to be a leading real estate services provider, offering a full range of services including sales and leasing for all types of property, property and facilities management, valuation and advisory, and research and consulting. For more information, visit the company's website at www.cbre.co.th .
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