Skyscraper office rents in Asia-Pacific rise fastest worldwide: Survey

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Hong Kong skyline with storm coming up_Arno Maierbrugger
Hong Kong’s office towers command the highest rents in Asia Pacific © Arno Maierbrugger

Rents in commercial towers in Asia-Pacific are increasing faster than those in Europe and North America, according to the latest Skyscraper Index by global property firm Knight Frank.

The its new bi-annual report, which examines the rental performance of commercial buildings with more than 30 storeys, shows that rents in Hong Kong’s skyscrapers are the highest in the world by some margin, at $278.50 per square foot per annum.

It is followed by New York, where rents have reached $158 per square foot, Tokyo ($149.50) and London ($114) which retains its place in the top five of the index despite the Brexit vote.

Skyscrapers in Shanghai recorded the strongest rental growth in the first half of 2016, at 7.6 per cent. Shanghai was followed by Sydney, where rents grew by 6.6 per cent over the period, Hong Kong (5.9 per cent) and Taipei (5.7 per cent). Toronto, where skyscraper rents have reached $49 per square foot, was the only city outside of the Asia-Pacific region to feature in the top five of the index by rental growth.

Knight Frank’s analysis shows that rents in skyscrapers in European cities were stable over the first half of the year. Singapore is the only global city where skyscraper rents significantly decreased for the period, with the 7 per cent drop attributed to over-supply and diminishing occupier confidence as a result of the slowdown in the Chinese economy.

Knight Frank’s Skyscraper Index forms part of its 2017 Global Cities Report, which explores the future of the built environment in cities worldwide.

“Over the first half of the year we have seen skyscrapers in Asia-Pacific outperform their counterparts in Europe and North America,” says Dana Salbak, Associate Partner at Knight Frank.

“Rents in Hong Kong’s skyscrapers remain the highest in the world, and with demand likely to outstrip supply for the foreseeable future we expect the city to retain its top position in the index. Furthermore, the supply-demand dynamics in Hong Kong will continue to support rental growth in Shanghai’s skyscrapers, as many companies opt to relocate there,” she adds.

Prime office rents for upper floors in skyscrapers
Ranking City Rent ($/square foot/per annum) % growth in six months to Q2 2016* Rent ($/square meter/per annum)
1 Hong Kong $278.50 5.9% $2,996.44
2 New York (Manhattan) $158.00 1.9% $1,700.70
3 Tokyo $149.50 0.0% $1,610.27
4 London (City) $114.00 0.0% $1,225.55
5 San Francisco $113.00 2.7% $1,216.32
6 Sydney $90.75 6.6% $976.82
7 Boston $77.00 0.0% $828.82
8 Singapore $72.00 -7.0% $774.79
9 Shanghai $72.00 7.6% $774.00
10 Beijing $63.00 3.3% $678.04
11 Chicago $59.00 0.0% $635.07
12 Paris (La Défense) $56.50 0.0% $609.58
13 Mumbai $53.00 4.7% $568.67
14 Miami $53.00 2.0% $568.67
15 Frankfurt $52.50 0.0% $565.20
16 Toronto $49.00 4.9% $529.63
17 Melbourne $47.00 3.0% $506.58
18 Los Angeles $46.00 2.2% $495.14
19 Mexico City $44.59 0.6% $535.08
20 Dubai $43.50 0.0% $468.79
21 Taipei $38.50 5.7% $415.37
22 Seoul $32.50 0.2% $351.13
23 Madrid $28.50 0.0% $307.73

 

* Excludes exchange rate effects; conversion to US dollar based on June 30, 2016 rates

Note: Upper floors is defined as above the regular skyline, thus offering panoramic views, but excluding the very top floors.

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Reading Time: 2 minutes

Hong Kong’s office towers command the highest rents in Asia Pacific © Arno Maierbrugger

Rents in commercial towers in Asia-Pacific are increasing faster than those in Europe and North America, according to the latest Skyscraper Index by global property firm Knight Frank.

Reading Time: 2 minutes

Hong Kong skyline with storm coming up_Arno Maierbrugger
Hong Kong’s office towers command the highest rents in Asia Pacific © Arno Maierbrugger

Rents in commercial towers in Asia-Pacific are increasing faster than those in Europe and North America, according to the latest Skyscraper Index by global property firm Knight Frank.

The its new bi-annual report, which examines the rental performance of commercial buildings with more than 30 storeys, shows that rents in Hong Kong’s skyscrapers are the highest in the world by some margin, at $278.50 per square foot per annum.

It is followed by New York, where rents have reached $158 per square foot, Tokyo ($149.50) and London ($114) which retains its place in the top five of the index despite the Brexit vote.

Skyscrapers in Shanghai recorded the strongest rental growth in the first half of 2016, at 7.6 per cent. Shanghai was followed by Sydney, where rents grew by 6.6 per cent over the period, Hong Kong (5.9 per cent) and Taipei (5.7 per cent). Toronto, where skyscraper rents have reached $49 per square foot, was the only city outside of the Asia-Pacific region to feature in the top five of the index by rental growth.

Knight Frank’s analysis shows that rents in skyscrapers in European cities were stable over the first half of the year. Singapore is the only global city where skyscraper rents significantly decreased for the period, with the 7 per cent drop attributed to over-supply and diminishing occupier confidence as a result of the slowdown in the Chinese economy.

Knight Frank’s Skyscraper Index forms part of its 2017 Global Cities Report, which explores the future of the built environment in cities worldwide.

“Over the first half of the year we have seen skyscrapers in Asia-Pacific outperform their counterparts in Europe and North America,” says Dana Salbak, Associate Partner at Knight Frank.

“Rents in Hong Kong’s skyscrapers remain the highest in the world, and with demand likely to outstrip supply for the foreseeable future we expect the city to retain its top position in the index. Furthermore, the supply-demand dynamics in Hong Kong will continue to support rental growth in Shanghai’s skyscrapers, as many companies opt to relocate there,” she adds.

Prime office rents for upper floors in skyscrapers
Ranking City Rent ($/square foot/per annum) % growth in six months to Q2 2016* Rent ($/square meter/per annum)
1 Hong Kong $278.50 5.9% $2,996.44
2 New York (Manhattan) $158.00 1.9% $1,700.70
3 Tokyo $149.50 0.0% $1,610.27
4 London (City) $114.00 0.0% $1,225.55
5 San Francisco $113.00 2.7% $1,216.32
6 Sydney $90.75 6.6% $976.82
7 Boston $77.00 0.0% $828.82
8 Singapore $72.00 -7.0% $774.79
9 Shanghai $72.00 7.6% $774.00
10 Beijing $63.00 3.3% $678.04
11 Chicago $59.00 0.0% $635.07
12 Paris (La Défense) $56.50 0.0% $609.58
13 Mumbai $53.00 4.7% $568.67
14 Miami $53.00 2.0% $568.67
15 Frankfurt $52.50 0.0% $565.20
16 Toronto $49.00 4.9% $529.63
17 Melbourne $47.00 3.0% $506.58
18 Los Angeles $46.00 2.2% $495.14
19 Mexico City $44.59 0.6% $535.08
20 Dubai $43.50 0.0% $468.79
21 Taipei $38.50 5.7% $415.37
22 Seoul $32.50 0.2% $351.13
23 Madrid $28.50 0.0% $307.73

 

* Excludes exchange rate effects; conversion to US dollar based on June 30, 2016 rates

Note: Upper floors is defined as above the regular skyline, thus offering panoramic views, but excluding the very top floors.

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