Hong Kong has overtaken New York to become the most expensive world city in which to rent space for the first time since 2011, according to the latest Savills Live/Work Index. London, which held the top spot from 2011 to 2015, now ranks number three behind New York. But the big story of the past year has been the rising cost of accommodating employees in leading European and Chinese cities (see full table below).
The average rental cost of office and residential space per employee in Hong Kong now stands at US$112,400 per year, having risen 5.0 per cent in the past twelve months. The equivalent space in New York costs US$108,200, down -1.7 per cent year on year, while the London rent bill slipped -1.3 per cent in sterling terms to US$96,000. Exchange rate fluctuations mean that London actually looks 2.7 per cent more expensive to the dollar operator than last year.
Residential rents have been driven higher in Hong Kong due to limited supply, particularly in the prime markets, office rents have been inflated by demand from mainland firms as well as new tech and co-working operators. At the same time, New York residential rents have continued to be suppressed by a supply glut, while office rents have fallen slightly as employers look to shrink their footprint and ‘densify’ their office space.
For more information, click 22102018 – Savills announce Live – Work Index 2018 – EN
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