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Hong Kong home to world's most costly offices

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Hong Kong is currently home to the most expensive offices in the world, making the region one to watch for those looking to invest in commercial spaces.

In fact, according to a new release from Knight Frank, office space in the massive city is actually more than twice as expensive as any other city in the world - beating out others such as London, New York and San Francis​co.

Knight Frank carried out a 2015 global commercial property outlook that investigated capital values in prime offices across 32 cities, and found that Hong Kong space is valued at US$70,000 (AU$85,000) per square metre. This places Hong Kong office space more than three times higher than the City of London.

"Despite strong recent growth in capital values and an uneven global recovery, Knight Frank is forecasting further growth in cross-border investment in 2015, as investors seek better returns and diversification outside home markets," the Knight Frank release explained.

"[We believe] that global investment volumes will rise by at least 10 per cent to over US$700 billion (AU$856 billion) in 2015, given the significant weight of capital targeting real estate."

The firm explained that final data for 2014 should show that global investment volumes for commercial property in 2013 climbed 15 per cent from 2013.

This year, Knight Frank predicts that improving tenant demand for offices (as well as falling availability) will lead to rental growth, and specialist property will continue to attract investors.

"The availability of land and land values are the fundamental issues that are driving rents and capital values in Hong Kong and Singapore, in particular," explained Darren Yates, the Head of Global Capital Markets Research at Knight Frank.

"These locations have a very constrained supply of land, combined with high population densities and an abundance of successful global companies with an ability to pay higher rents."

Date Published: 23 Jan 2015
Category: AsiaNews

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