March 18, 2002—Despite declining rents in London over the last year, office space in the British capital remains the most expensive in the world, according to a report by property consultants Healey & Baker and Cushman & Wakefield.
In London, prime office space costs an average of $1,728 (1,704) per sq m per year including rent, property taxes and service charges. Tokyo continued to be the second most expensive city at $1,213 (753), and Paris moved into third place at $991 (615).
The annual research Business Space Across the World, covering 45 countries, also showed that the European vacancy rates have increased from 3.75% to 5.4%, while overall rents grew 1.5%—only a slight increase compared to the year before when it rose 15%.
David Hutchings, head of the European Research Group at Healey & Baker said: “2001 started with a continuation of the robust activity of the preceding year, but the second half of the year was a different story. The decline in the telecoms and hi-tech sectors gave us early warning that the record levels of growth and activity seen in 2000 were not going to be bettered but as the year progressed, conditions became markedly tougher.
“Recession in North America, uncertainty in Europe and then the terrorist attacks of 11 September all dampened business confidence. With slower decision making and a switch from expansion to consolidation among many office occupiers, we have seen a downturn in the office sector which has been sharper than anticipated.”
—Jessica Jarlvi
Reprinted with permission; copyright 2002 i-FM
