London's West End is the most expensive office market

[LONDON] London's West End replaced central Hong Kong as the world's most expensive office property market, CBRE Group said.

Occupancy costs, which include rent, local taxes and service charges, climbed 14 per cent to US$259 a square foot in the West End, the Los Angeles-based broker said in a statement on Wednesday. Rates in central Hong Kong dropped 4.7 per cent to US$234 a square foot.

Rents are climbing in London's West End as the UK economy improves and hedge funds compete for space in the district. Regulations protecting older buildings and preventing high-rise construction has created a shortage of office space in the West End, which includes Mayfair and St James's.

Occupancy costs in central Hong Kong, which has more empty workspace than other parts of the city, declined as companies were reluctant to commit, CBRE said.

Global occupancy costs climbed 2.2 per cent during the year through September, led by the Americas, which climbed 4.6 per cent, according to the statement. Costs in the Asia-Pacific region increased 3.2 per cent. In Europe, the Middle East and Africa they rose 0.4 per cent.

Beijing's Finance Street and Central Business District were third and fourth, with of US$197 and US$190 a sq ft, respectively. Hong Kong's West Kowloon was fifth, at US$170 a sq ft. North America was led by New York's Midtown, which climbed 5.6 per cent to US$121 a sq ft. - Bloomberg