Asia offers some of the most expensive serviced office space on the planet

Asia offers some of the most expensive serviced office space on the planet

A report this week from real estate services company CBRE Inc. states that five of the six most expensive office areas in the world are now in Asia - but what is driving this latest land rush?  CBRE's global chief economist, Raymond Torto was quoted as saying "Demand is coming from a lot multinational corporations who want to place a stake into these developing economies. When they look around some of these cities, they want to be in the best locations because there's not a lot of good infrastructure. You want to be close to other businesses. You want to be close to transportation. And you want to be in a quality property."

With the economies of much of the Asian sector out-performing their Western counterparts it is the case that the supply of high quality office space in markets such as Hong Kong, Beijing and New Delhi is becoming increasingly strained and demand shows no sign of abating.  Hong Kong's Central Business District leads the charts for the third successive year, with average annual rental charges per square foot reaching the $235 mark in March.  Beijing's Financial Street was not far behind at $195 per square foot, but whilst these markets were the most expensive, Jakarta saw by far the highest year-on-year inflation rate with rental costs increasing nearly 40% since 2012.

NewOfficeAsia.com have been analysing these figures and feel that this is a trend which is likely to continue for the foreseeable future.  Where as in many western cities many businesses are choosing to migrate from the expensive and over-crowded central business districts to take advantage of lower rates and the better quality of life offered by outer-lying areas, this option is often not feasible in developing cities.  It tends to be the case that in order to benefit from essential services such as super-fast internet and a reliable transport infrastructure, businesses are forced to coalesce around specific districts that have been developed specifically for the purpose of doing business. 

London in particular is seeing a marked increase in 'out-of-town' satellite business hubs in which multiple companies are coming together under one roof in an area that is well connected both socially and technologically.  Until developing cities are able to offer this model in a widespread and effective manner it is likely that rental rates and demand will continue to rocket and that the 'business hotspots' will become ever more crowded.

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