The West End was followed by Paris at US $15,520. Of the Top 10, seven are Western European cities. An exception is Washington DC, which has risen five places to become the fourth most expensive location. Office accommodation there costs US $14,250 per workstation a year, a 25% year-on-year increase.

In London, visible signs of a recovery are evident in the office market with stronger prospects of rental growth this year. Higher occupancy costs relative to the US are partly due to a 9% appreciation in the value of the pound against the dollar.

On a regional level, office locations in Western Europe remained the most expensive of all the six regions with a premium of 41% over the next most expensive region, North America. Occupancy costs in Central and Eastern Europe exceeded those in Central and South America due in part to the 7% appreciation of the Euro against the US dollar.

"The survey results show that Europe--especially London--remains extremely strong as a global business center," says Elspeth Lochhead, director of DTZ Pieda Consulting. "Occupancy costs have risen, reflecting London's continuing popularity, despite fears that emerging office markets like India might undermine future growth. However, much of this year's rise in costs in the UK reflects the strengthening of the pound.

"We anticipate that occupancy costs will continue to rise in major business centers around the world during 2005," she continues. "Consequently, the differential between the established major world financial centers, such as London, New York and Hong Kong, and the major growth centers in Asia and Eastern Europe, is unlikely to erode substantially during the next 12 months."