WORLD PROPERTY CHANNEL ®

• C&W Places Tokyo Ahead of London While DTZ Sees London Still Ahead of Tokyo
• 86% of 131 Cities Monitored by Cushman & Wakefield See Rents Dropping.
• Tokyo Class A Space is Going for $190 Per Square Foot; London West End,  $161 psf; Hong Kong, $160 psf, according to C&W.
• DTZ Estimates London West End Top Annual Rent at $21,420.
• Singapore, Hong Kong and Tokyo See Rates Fall 45%, 35% and 21% Respectively.
• Kiev and Dublin Experienced the Steepest rent Declines in Europe.
• Boston, San Francisco, Seattle and New York Had the Sharpest Rate Drops in the U.S.

Tokyo skyline

(NEW YORK, NY) -- In a see-saw contest that changes every six months, depending on who is doing the surveying, Tokyo and London's West End once again are rivals for the questionable distinction of being the world's most expensive Class A office market.

But this time around, two longtime international real estate advisors and consultants see the leading spots differently.

Cushman & Wakefield of New York City, which has been monitoring office sites since 1917, picks Tokyo ahead of London as the most expensive market in its latest findings.

However, DTZ, a 225-year-old London-based global real estate adviser operating across the European Market, Asia Pacific and the Americas, says London retains its crown as the priciest location.

Please see related Real Estate Channel postings

• London Replaces Tokyo as World's Most Expensive Office Market, Dec. 4, 2009
• CBRE Releases Global Retail Report, New York City Still Most Expensive Market , June 30, 2009
• Tokyo Overtakes London's West End as Most Expensive Office Market in the World, June 3, 2009

Even as rents were falling in 86% of the 132 cities C&W monitored in 63 countries, Tokyo's $190 per-square-foot quote was the most expensive around the globe, according to C&W.

London, Big Ben Clock on The Thames River

London's West End, at $161 per square foot was second; Hong Kong at $160 per square foot, was third, according to Cushman & Wakefield.

DTZ positions London's West End at the top of the most expensive list with estimated annual average rent of $21,420.

DTZ doesn't show rents for nine other markets in its top 10 survey but says Frankfurt, with an annual rent of $14,700, is in the 10th spot.

DTZ's list shows these rankings based on average annual rents:

1 - London (West End) ($21,420)
2 - Tokyo (Central 5 Wards)
3 - Washington D.C.
4 - Hong Kong
5 - Geneva
6 - Paris (CBD)
7 - New York City (Midtown)
8 - Zurich
9 - Boston
10 - Frankfurt ($14,770)

DTZ states London's West End, costing an annual average $21,420 (£13,184), despite an 11% drop in occupancy costs, is also projected to remain the most expensive location through 2013.

Hong Kong skyline

Hong Kong, Tokyo, Washington D.C. and Paris (CBD) should follow London, in that order, in the top five in 2013, according to DTZ projections.

Cushman & Wakefield notes "the world's leading cities have suffered an unprecedented fall in demand for office space...contributing to the first global fall in office rents since 2003."

Rents fell the steepest in all of the key cities of Asia Pacific.  Singapore rents fell 45%; Hong Kong, 35%; and Tokyo, 21%.

In Europe, Kiev and Dublin were the biggest losers.  In the U.S., Boston, San Francisco, Seattle and New York City all experienced rent declines in Class A office space, according to C&W.

For most of 2010, however, C&W says the outlook is more positive. "As major economies return to growth, demand for office space from corporate (users) is likely to once again increase and reduce supply."  

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