Hong Kong remains the most expensive place in the world to rent office space in a skyscraper.
Photo: Edward Wong
Skyscrapers in Hong Kong are the most expensive commercial real estate in the world, according to new analysis using rental values and yields.
Pricing for skyscrapers in Hong Kong has reached $8,000 per square foot, over 60% higher than tall buildings in Tokyo at $4,900 per square foot, according to the inaugural active capital report from international real estate advisor Knight Frank.
In third place is Manhattan at $3,700 per square foot, followed by San Francisco at $2,500 per square foot and then the City in London at $2,450 per square foot.
The report points out that Hong Kong developer Henderson Land recently paid $3 billion for an old five storey car park, indicating the frenzied state of Hong Kong’s property market.
The price was a record lump sum for Hong Kong and a record also per square foot and Knight Frank says that the sale sets the world’s most expensive city even further apart from its rivals.
‘For the first time we have comparatively analysed the capital value of the world’s skyscrapers, which are seen by many as a bell weather for the commercial property market as a whole,’ said Andrew Sim, head of global capital markets at Knight Frank.
‘Pricing is highest in Hong Kong which reflects the world’s highest skyscraper rents, and the lack of available land for future development. Similarly, pricing in major financial centres such as Shanghai, Singapore, Manhattan and London is supported by the high level of demand for space in these buildings from financial services businesses, in particular,’ he explained.
‘However, pricing for tall buildings in Sydney, Melbourne and Taipei is likely to move more rapidly in the next two years, and we expect to see investors in search of trophy assets looking beyond the major financial centres,’ he added.