London Office Rents Highest in Europe
London office buildings remained the most expensive to rent in the first half of 2017 compared to any other city in Europe, according to a Knight Frank report.
The report based its findings on commercial properties higher than 30 floors. It showed that those in London cost US$110 per square foot, even amid the lingering uncertainty over Brexit.
The price of renting a more than 30-floor office building in London amounted to almost double the cost in Paris and Frankfurt, where prices reached UK £44 per square feet and UK £41 per square feet, respectively, according to the report.
For landlords, commercial rent arrears recovery is just as important as keeping track of rental price growth in the city. The good news, however, involves companies still willing to pay a premium to stay in London offices than Frankfurt, since the British capital is “a more important international hub” for them, according to Knight Frank Chief Economist James Roberts. This trend reflects the resiliency and popularity of London as a business destination.
London office rents may be the most expensive in Europe, but those in Hong Kong emerged as the priciest in the world at UK £230 per square foot. New York rents ranked behind at UK £123 per square foot, while Tokyo skyscrapers will require tenants to pay UK £106 per square foot.
In terms of highest price growth, the Toronto market recorded an 11.9 percent growth in rents for the first half of 2017, amounting to UK £44 per square foot. In the U.S., a rebounding economy and low jobless rate helped uplift business confidence and demand for prime buildings.
The impact of Brexit has placed the status of London as a prime financial centre at risk, yet the cost of renting offices in the City seemed to indicate otherwise. Regardless, many still consider acquiring a commercial lease in London despite the high price.