Hong Kong is the most expensive city in the world in which to buy or rent skyscraper office space, according to the latest figures on the subject released by the real estate experts of Knight Frank.
In fact, the latest Knight Frank Skyscraper Index puts Hong Kong well out in front of any other city in the world when it comes to the costs associated with office space in its tallest and most prestigious business buildings. According to the numbers as 2014 entered its final quarter, offices in Hong Kong Skyscrapers cost as much as $6,330 per square foot, while Tokyo, the nearest rival to that lofty figure, commands roughly 50 per cent lower figures for offices in its tallest towers.
Meanwhile, in Europe, London was found to be the city with the most expensive and most sought after office towers. The latest figures show space in London office skyscrapers commanding rental rates more than double those available in comparable premises in either Paris or Frankfurt. According to Knight Frank’s most recent assessments, there is growing confidence among international companies and investors that office markets in the British capital are set to strengthen notably heading into 2015.
Reflecting generally on the appeal of skyscrapers in major cities around the world, Knight Frank’s head of commercial research James Roberts said: “Skyscrapers are the Lamborghinis of the office world, as investors pay more to own these prestige and high quality buildings.
“Upper floors in skyscrapers command higher rents compared to office space in low rise buildings, due to the ego appeal of having an office that towers over competitors. Also, the panoramic views are a strong marketing tool, as a client can be taken into a meeting room offering an aeroplane perspective on the city below.”
Among the companies to have taken ownership of prominent office towers in major global cities in recent months was the IT group Salesforce.com, which acquired landmark premises in both central London and in San Francisco. It is thought that a rising number of fast-growing technology businesses are currently keen to signal their strength by buying or signing up to occupy office space in skyscrapers in city centre locations right around the world.
“There are past examples of new industries during their ascendance phase choosing to take tower space for their offices, as an arriviste statement,” Roberts explains.
“Examples include the 1931 Chrysler Building, during the inter-war boom for motoring, and the Pan Am Building in the 1960s, when air travel was first becoming a mass market. As the digital technology revolution continues, skyscrapers could offer a quick way of delivering large blocks of office space to keep pace with rapid headcount growth for such firms.”
Jonathan Weinbrenn of search office space spent a number of years in Hong Kong:
“Having lived and worked in Hong Kong this report comes as no surprise. The cosmopolitan appeal of Hong Kong with international business continues to be a major draw, as well as the territory acting as a gateway to mainland China and the Asia Pacific region as a whole. What will be interesting to see is if the continued unrest and student demonstrations have any impact on the stability of the Hong Kong economy and then the commercial office market and its landmark buildings.”