London, Aug. 8 (Reuters): London’s West End is the world’s most expensive office location and its city financial district has overtaken Tokyo in the past three years to occupy the number two slot, a survey of the relative costs of office space showed.
“London’s West End remains the most expensive place in the world to occupy offices, with the space costing $149 a square foot per annum including service charges and local taxes,” CB Richard Ellis, the largest global property services company, said in its survey of 158 office locations. “This is despite the fact that occupation costs have fallen from $151 a square foot six months ago,” it added.
London’s city district is now also more costly in dollar terms than central Tokyo. This represents a complete turnaround in three years as in 2000 the top two most expensive office locations were both in the Japanese capital.
Paris has climbed the table to overtake Tokyo’s outer central area and has the fourth most pricey office space in the world, while British cities occupy four of the top 10 slots.
CB Richard Ellis said exchange rate movements were the driving force behind the relative shifts in rankings.
The weakness of the US dollar, particularly relative to sterling, has made European locations appear much more expensive than those in the US and southeast Asia. Several Asian currencies are pegged at a fixed exchange rate against the dollar, whereas the yen, for example, has gained ground, but by far less than the euro. This means that although occupation costs are falling in terms of the local currency in almost all locations, in dollar terms and relative to other cities Europe has become more expensive.