Office occupancy costs decline across Asia Pacific

Office occupancy costs decline across Asia PacificThe Asia Pacific region experienced the biggest decline in office occupancy costs over the past year, falling 8.3 per cent, according to DTZ’s annual Global Office Thermometer report.The 18th annual edition of the report, which analyses 133 cities, finds that an appreciating US dollar, weak economic growth in Europe, and significant new supply in emerging markets combined to erode costs across many global markets. The annual US Dollar cost of a workstation fell 4.4 per cent globally on average in 2014. “In Australia, weak fundamentals together with some depreciation in the Australian dollar has led to declines in excess of 12 per cent in USD terms in Brisbane and Perth,” says DTZ head of Asia Pacific research, Dominic Brown.In other parts of the region, a large pipeline of supply in Indian markets has served to exacerbate local currency depreciation, while strong tenant demand in Tokyo has offset some of the currency effects.Occupancy costs in North America and Greater China increased by two per cent and 2.5 per cent respectively, while Europe witnessed an average decline of 7.8 per cent.London’s West End remains the world’s most expensive location for office space at USD$29,000 per workstation, which is now nearly a third more expensive than second-placed Hong Kong, and 11 times more expensive than the cheapest European city, Lisbon.On a city level, Moscow saw the sharpest fall in occupancy costs in 2014, falling by a third. Abu Dhabi saw the fastest increase in occupancy costs of any city, increasing by 36 per cent on a USD basis. “The latest results show that Asia Pacific remains attractive to tenants with cost reduction in USD terms,” DTZ’s head of global occupier services in the Asia Pacific, David Jones, concludes.