January 9, 2004—London’s West End remains the world’s most expensive office location, according to new research. DTZ’s seventh annual Global Office Occupancy Costs survey looked at accommodation costs in major locations covering 111 business districts in 43 countries.
The survey confirms the West End and Paris as the top two most expensive locations globally, with accommodation costs of $16,682 (9175) and $15,700 (8635) per workstation per annum respectively. Toronto, despite the impact of SARS, has moved up three spots into the top ten, but the biggest climber is Dublin moving up nine spaces to number ten. In an opposite trend, Midtown New York dropped out of the top three.
Despite economic recession in Germany, both Frankfurt and Munich remained in the top ten at $14,071 (7739) and $11,262 (6194) respectively.
Most locations have continued to register further declines in locally quoted occupancy costs during 2003, reflecting a weak and uncertain global economic environment, DTZ reports.
The top ten most expensive office locations by occupancy costs (with last year’s ranking in brackets) are:
- London (West End) (1)
- Paris (2)
- Frankfurt (4)
- London (City) (5)
- Tokyo (Central 5 Wards) (6)
- New York City (midtown) (3)
- Munich (9)
- Washington DC (8)
- Toronto (12)
- Dublin (19)
Commenting on the survey’s findings, John Forrester, head of DTZ Corporate Services, said: “In local currency terms, virtually every major center in the world is subject to falling occupational costs per workstation, reflecting economic pressures and reduced tenant demand. In the UK this is equally true as Central London (City) costs are down by 8.8% and London (West End) down 5.1%. However, in international terms, the situation is distorted by significant currency movements. In Euro terms, London (City) is some 17% cheaper than last year, but in dollar terms it is virtually static.”
Forrester added: “Whilst London remains one of the most expensive locations in the world, its global stature is the real driver for location decisions. In a sense, the fact that in relative terms it is expensive is a market manifestation of the desirability of the location.”
In a change from previous studies, DTZ’s rankings for 2004 focus on total occupancy costs per workstation. The change, the firm says, from unit area to a workstation basis better reflects the true costs of accommodation.
It remains important to be clear about what is being measured when comparing research results, however. Last autumn, for example, Johnson Controls concluded that the UK offered the lowest office costs in Europe.
For more information, contact DTZ.
—Elliott Chase
Reprinted with permission; copyright 2004 i-FM
