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Skyscraper office rents continue to rise

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More companies are seeking desirable office spaces, resulting in a high property valuation of skyscrapers. With Hong Kong leading the world, a property development plan is essential to realising the benefits of this ongoing trend.

Skyscraper rent prices continually rising

Skyscraper office rent prices in New York have rapidly increased by 20 per cent since July 2014, and according to global property consultancy Knight Frank, the price now sits at US$150 per square foot.

While the rate of increase in New York has outperformed Hong Kong, the Asian city still maintains the highest skyscraper office rents at US$250.50 per square foot.

Head of Global Leasing Services at Knight Frank, William Beardmore-Gray, notes the value that companies are placing on where their office is situated. He states that there is a certain level of prestige associated with occupying prime real estate.

"Companies want to use their offices as a way to make staff feel they are valued and important. You achieve that when you put workers in the building that appears as the backdrop during the stock market report on the evening news," says Mr Beardmore-Gray. 

Alongside this, Knight Frank's Global Cities report also maintains that Hong Kong skyscrapers are the most expensive commercial real estate. Further, the report states that capital values on the premium top floors of Hong Kong's skyscrapers are 50 per cent higher than those in Tokyo, the city ranked second.

How has Hong Kong maintained its top ranking?

UK real estate firm, Candy & Candy, states in its Global Prime Sector report that Hong Kong holds the largest amount of direct property holdings by value. The 2015 report estimates this to be $798 billion, higher than anywhere else globally. 

The report suggests that this is due to investors from mainland China spending capital in Hong Kong, in culmination with high property values. This is essential to understanding the property feasibility in the area and ensuring valuation is accurate. 

Date Published: 14 Oct 2015
Category: General News

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