Office rent: HK on top, Dubai at No. 18

Dubai: Hong Kong is comfortably placed at the top of global destinations with the highest office rentals ($255.5 a square foot annually) in towers, according to Knight Frank’s estimates based on rental growth over the latest six-month cycle.

New York ($153 a square foot) and Tokyo ($125) towers followed in second and third sports, but with rental increases of 2 and 3.4 per cent, respectively, above Hong Kong’s 1.9 per cent increase during the period.

London ($122) is in fourth, but with rental spikes of a substantial 10 per cent during the six-month period.

"This is partly thanks to a buoyant occupier market, which has left the vacancy rate at a 14 year low," according to Knight Frank.

"Also, several high-profile new tower completions have delivered space to the market capable of setting new benchmark levels for rents."

Dubai finds a spot in the Top 20, at 18th. An office space at one of the city’s glittering office high-rise addresses will be around $43.5 a square foot, based on Knight Frank estimates.

But, it reckons, that rents remained unchanged during the recent six month cycle.

From a longer-term perspective, for tenants and property owners alike, sharp rental increases are the last thing the market needs.

The important thing is for existing Grade A locations to retain occupancies well above the 80 per cent mark and, preferably, through longer-term contracts.

At the same time, freshly completed upscale premises seem to be doing just as well in winning blue-chip tenants.

Within this delicate dynamic, any sudden spike in rentals is best avoided for Dubai’s office marketplace, the report said.