In the vast majority of companies, real estate is the second largest cost next to payroll. Depending on geography the actual rent price varies a lot. As the tides of the world economy shift, supply and demand decide which places are more expensive than others.
In this blog post, we take a look at the 10 most expensive districts in the world when it comes to office rents.
#10 Shanghai, Pudong
Pudong—literally “The East Bank of the Huangpu River” – refers to the eastern part of downtown Shanghai. Home to most of the iconic skyscrapers of the city, Pudong is a rapidly growing commercial center of the region.
To get a sense of the rapid growth in Pudong, checkout this cool time-lapse to experience the transformation Pudong underwent from 1987 to 2013
Shanghai Pudong office rent: $134 / sqft per year 1
#9 Tokyo, Marunouchi
Situated in the heart of the largest metropolitan area on earth, Tokyo’s Marunouchi district is a commercial district housing several large domestic banks as well as Japan offices of numerous international banks.
Situated next to the Imperial Palace, the area was used in 19th century as parade grounds. The area was later purchased by the Mitsubishi company and was during a period called “The Mitsubishi Fields” by Tokyoites.
Prominent companies in the area: Mitsubishi Corporation, Hitatchi, Konica Minolta, Citigroup, JP Morgan Chase, Bloomberg, KPMG, PWC
Tokyo Marunouchi office rent: $138 / sqft per year 1
With an average office rent price of $138 Tokyo’s Marunouchi district dropped from 6th to 9th most expensive corporate rents compared to previous year.
Shenzhen, sometimes referred to as the Silicon Valley of Hardware, has quickly become a economic hub to be reckoned with. Over the past four decades, Shenzhen has developed from a small fishing village to a metropolis, a transition made possible by rapid foreign investment since the “reform and opening” policy in 1979.
As a leading global technology hub, Shenzhen is home to numerous multinational companies such as Tencent, ZTE and Huawei.
Shenzhen office rent: $140 / sqft per year 1
To put Shenzhen’s hypergrowth in perspective: last year, Shenzhen wasn’t even on the Top 25.
#7 Beijing, CBD
The Beijing Central Business District is the primary area for finance, media, and business services in Beijing. The district is currently undergoing large-scale development.
In the eight years since the government decided to speed up the development of CBD, the district has attracted 117 Fortune 500 businesses in the financial, media and IT industries.
Beijing Central Business District office rent: $143 / sqft per year 1
#6 New Dehli
Since the year 2000, the GDP per capita in India has grown more than 400%. And the capital mega city New Dehli keeps climbing in international comparisons. As the site of Central Government of India, New Dehli is the natural home to many large domestic and national companies.
New Dehli office rent: $147 / sqft per year 1
Compared to last year’s data, New Dehli overtook three places on the list, climbing from 9th to 6th place of most expensive premium office rent prices.
#5 Silicon Valley
Few have missed the headlines of soaring real estate prices in the Bay Area. Silicon Valley, as a rather large and loosely defined area, includes famous tech cities like Palo Alto, Menlo Park, Cupertino and Santa Clara.
A combination of large tech giants such as Google, Apple, Facebook, upcoming ambitious tech startups and proximity to venture capital has earned Silicon Valley the 5th place on the list of most expensive real estate in the world.
Silicon Valley office rent: $158 / sqft per year 1
#4 Beijing, Finance Street
Located in the capital’s historic center, Finance Street is China’s equivalent to Wall Street. The district was largely developed in time for the Beijing Olympic Games in 2008, and weaves a mix of residential and commercial real-estate.
Finance Street is home to one of the central banks as well as other large Chinese banks such as People’s Bank of China. According to Chinese officials, the district will be positioned more toward regulatory role, concentrating national regulatory commissions of the central government to the district.
Beijing Financial Street office rent: $190 / sqft per year 1
#3 London, West End
The West End of London (commonly referred to as the West End) is an area of Central London, west of the City of London and north of the River Thames, in which many of the city’s major tourist attractions, shops, businesses, government buildings and entertainment venues, including West End theatres, are concentrated.
As the largest central business district in the United Kingdom, comparable to Midtown Manhattan, the premium rent prices in the West End takes the district to a third place in most expensive real estate in the world.
London West End office rent: $193 / sqft per year 1
#2 New York, Midtown
As a home to some of New York City’s most iconic buildings, such as the Empire State Building, the Chrysler Building and the UN headquarters, Midtown Manhattan is the largest central business district in the world.
The majority of the city’s skyscrapers are located in Midtown, as well as a slew of corporate headquarters such as Bloomberg, Citigroup, Deloitte, JP Morgan Chase, NBC, New York Times, Time Warner.
New York Midtown office rent: $194 / sqft per year 1
And finally, the place with the most expensive rent prices in the world…
#1 Hong Kong, Central
The uncontested first-place holder is once again Hong Kong. With $323 per square feet and year, Hong Kong office rent prices completely dwarf the rest of Top 10. The tiny island in the South Chinese Sea has been known for its insane house prices for quite sometime. The city ranks as the fourth most densely populated city in the world, with more than seven million residents housed on 1 106 square km (427 sq miles).
Since the city’s inception, it has been the de-facto access point for companies looking to do business with the world’s most populous country and second largest economy, China.
Central Hong Kong office rent: $323 / sqft per year 1
Honorable mentions: Stockholm ($99) with Europe’s second most expensive office rents, Dubai ($94) as the only district in the Middle East with a spot on Top 50, and Sao Paulo ($57) as the sole South American district to make Top 50.
1 Includes rent and additional services. Global Premium Office Rent Tracker, JLL (2017)