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Where are the world's most expensive skyscrapers?


High-rise building seems to be a major construction trend for 2014, as evidenced by the dominance of apartment development in Australia. However, when it comes to the real behemoths of the urban landscape - skyscrapers - where in the world boasts the most valuable buildings?

According to a new report from property consultancy Knight Frank, skyscrapers in Hong Kong are the most expensive in the world. Capital values of these buildings in Hong Kong have now reached $6,330 per square foot. It is these sort of figures that have enabled the region to claim the number one spot in Knight Frank's Skyscraper Index.

In fact, skyscraper values in Hong Kong are 50 per cent higher than those of the second city on the list, Tokyo. Given the substantial rents tenants often pay, skyscrapers can be a great property investment. Anyone looking to enter the market for these sizeable buildings will likely benefit from having sound investment appraisals in place.

James Roberts, head of research at Frank Knight, dubbed skyscrapers the "Lamborghinis of the office world" due to their prestige and quality. He added that these properties can make particularly attractive investments given the rates they typically demand, especially in the higher floors.

"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," Mr Roberts explained.

"Thus, the premium rents on offer justify the high prices investors will pay to own such a property."

According to Knight Frank, rents for upper floor real estate in London and Hong Kong skyscrapers can be 15 to 20 per cent higher than for the rest of the building.

Knight Frank pointed to key factors such as restricted geographic area, which forces developers to build upwards, as being behind Hong Kong's success in the index.

Wherever in the world they are located, these office towers can be a lucrative addition to any portfolio, and investors can take advantage of the latest property valuation software before launching into the market.

Date Published: 08 Oct 2014
Category: General News

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