New data released from GraphicSprings reveals the most expensive office locations in the world. Technology-rich markets and talent hotspots often attract significant corporate interest, leading to rising rental rates. So which cities have become a magnet for talent and tech, with the price tag to match?
GraphicSprings looked at the annual cost of office space, per square foot, in all of the major cities around the world. They then used the average space needed for each employee, as recommended by TMC, to calculate cost of office space needed for a single employee, each year, in the world’s major cities.
These are the top 10 most expensive office locations around the world:
|Location||Annual cost per employee in USD|
|1. Hong Kong, China||$27,331|
|2. Beijing, China||$25,821|
|3. New York, US||$25,217|
|4. Silicon Valley, US||$23,858|
|5. Shenzhen, China||$23,405|
|6. London, UK||$22,650|
|7. Tokyo, Japan||$20,083|
|8. Shanghai, China||$17,591.5|
|9. San Francisco, US||$16,761|
Rental costs for space have continued to rise in major office markets over the past year, with costs growing by an average of close to four % in 2017, while the average amount of space per employee has fallen by 32% since 2010. Increasing recognition by business owners that their workspaces can be a key differentiator in the battle for talent has meant that well-located, premium space, with access to excellent amenities, is in strong demand around the globe.
So where are the most in-demand and expensive office locations?
Asia came out as the continent with the highest number of most expensive office locations, with China taking four of the top 10 spots, Japan taking one and Singapore taking the final spot. All six of these Asian cities are major financial centres and rank in the top 25 of the Global Financial Centres Index, so it’s perhaps not surprising that they are sought after office locations with the price tags to match.
In Beijing and Shenzhen, the annual cost of office space per employee is more expensive than domestic rents in the most expensive parts of the city. In Shenzhen, for example, employers pay over 20% more for a single employee’s office space than the average cost of an entire, furnished apartment.
It may not come as a surprise to see the US and UK in the top 10 most expensive office locations, as they are home to two of the world’s major financial centres and have booming tech industries. What is surprising, however, is that rent only accounts for around 80% and 62% of the total occupancy costs in the US and UK, respectively.
The remaining costs are made up of things like service charges and local government taxes. In fact, London has the highest proportion of additional costs of any city included in the top 50 office locations.
Evan Fraser, spokesperson for GraphicSprings said, “In business, location is everything but it’s important to find a balance between basing yourself as close to the epicentre of your market niche as possible, and finding office space you can actually afford.”