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Real Estate

Places of work in world’s most linked cities include a excessive value

By December 17, 2016 No Comments

PETALING JAYA: The world’s most essential, influential and interconnected cities with the deepest swimming pools of companies and expertise proceed to command the very best workplace occupation prices, with Hong Kong topping the chart of worldwide actual property agency JLL’s Premium Workplace Lease Tracker. Hong Kong is adopted by London (West Finish), New York (Midtown), Beijing, Tokyo and Shanghai.

“The world’s most essential and interconnected cities dominate the highest spots within the rankings, JLL head of analysis for Asia Pacific Megan Walters mentioned. “There’s a clear demand for them as seen in how emptiness charges are lower than 2% in three out of those six gateway cities, particularly Hong Kong, Beijing and Tokyo,” she mentioned in a press release along with the discharge of the report.

Hong Kong stays the most costly workplace location, carrying a price ticket of US$302 (RM1,344) psf, a brand new excessive for town in contrast with US$262 in 2015.

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In keeping with JLL, Hong Kong’s prime place is a testomony to its attraction as a “globally fluent” enterprise hub with a spread of internationally recognised strengths.

“Its central district has seen sturdy progress in premium rents over the previous 12 months on the again of demand from mainland Chinese language companies and really restricted provide.

“Nonetheless, affordability and lack of accessible area are considerations which can be prone to speed up decentralisation to close by rising core districts that supply greater than 50% reductions to premium rents in Hong Kong Central, a pattern supported by infrastructure works,” mentioned JLL within the report.

In the meantime, London, in second place, has been impacted by the Brexit vote as company occupiers undertake a extra cautious method till there may be better political and financial readability. JLL additionally cited that the mix of sterling depreciation and a modest discount in internet efficient rents have brought on prices in US to decrease by 15% to 20%.

“Any additional downward stress on London rents might see it fall to the third place in 2017, [possibly] overtaken by New York (third place) the place premium rents have grown by 10% this yr and an extra uplift is in prospect in 2017,” it mentioned.

Transferring on to China, its main cities — Beijing (4th place) and Shanghai (sixth place) — have slipped marginally within the highest-office-rent listing.

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“Whereas premium rents have been maintained in Beijing and Shanghai, each cities have dropped one place within the international rating as a result of relative outperformance of New York and Tokyo (fifth place), respectively,” mentioned the report.

Tokyo’s transfer up the listing is supported by excessive leasing exercise and bolstered by massive ticket pre-commitments. An additional increase from a strengthening yen has seen town transfer into fifth place, overtaking Shanghai.

“The market [Tokyo] has potential to maneuver forward of Beijing in price phrases throughout 2017,” mentioned JLL.

Notable by their absence from the highest 10 are two established world cities — Singapore (18th place) and Paris (20th place). In keeping with JLL, Singapore has seen a rental correction as new provide has come on stream.

In keeping with Walters, this has put Singapore at a aggressive benefit over different extra pricey Asian gateways.

In the meantime, Paris has witnessed a rise in demand for iconic buildings which, mixed with a scarcity of instantly obtainable provide, ought to push up premium rents within the coming months.

On developments to look at within the close to future, JLL famous that affordability continues to be a priority in lots of cities and with a view to stay aggressive, the highest international cities might want to execute daring city transformation initiatives to make sure a provide of appropriately priced and versatile industrial area.

“Historically, premium workplace area has been the area of high-value, high-margin companies in monetary providers, skilled providers and high-end luxurious items. Extra lately, a better variety of tenants from the know-how sector are concentrating on premium buildings to draw prime expertise and improve their model fairness,” mentioned JLL.

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This story first appeared in TheEdgeProperty.com pullout on Dec 16, 2016, which comes with The Edge Monetary Each day each Friday. Obtain TheEdgeProperty.com pullout right here free of charge.