The survey studied rent, taxes and utility costs, which combinefor an occupancy cost. New York City's occupancy cost is $100 persf. London, by comparison, is $312 per sf.

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"As a place to do business globally, New York has a competitiveadvantage because it is relatively inexpensive compared with otherworld capitals," notes Maria Sicola, executive managing director ofresearch of Cushman & Wakefield in a prepared statement. "Costis a big driver for multinational corporations."

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The world's top 10 most expensive office locations saw rents--alarge component of occupancy costs--increase by an average 40% lastyear, according to the survey. In this year's ranking, Londonretains its title as having the most expensive office occupancycosts in the world, with one square meter of prime space inLondon's West End at $312 per sf, with rents up 30% last year inlocal currency terms. In second place is Hong Kong, at $238.58 persf, where rents were up 40% last year in local currency terms.

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The survey compares office occupancy costs in 203 key locationsin a record 58 countries around the world, with new entries in theglobal ranking including Kyiv in Ukraine, which ranked at 16th andVietnam's Ho Chi Minh City at 17th place. Of these 203 locations,79% showed rental growth last year, 20% stable rents and only 1%showed a rental fall--compared with 6% the previous year. Overallglobally, rents grew by 14% in 2007, compared with 10% in 2006.

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Sicola notes that "last year saw the fastest rate of growth inoffice occupancy costs in many of the world's top locations sincethe turn of the property cycle in 2001, with the strongest demandcoming from the financial sector. Behind this growth is a shortageof top-quality product as developers remain relatively cautious,especially compared with the previous peak years of 2001 and2002."

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She adds that "we are unlikely to know the full effect of thecurrent credit squeeze on the world's main office locations untilfurther into 2008. In the meantime, we foresee the market for theright product in the right location remaining robust, especially inthe more buoyant markets of Asia Pacific; although expectations arethat last year's strong rental growth will ease this year."

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In the top 10 of the global ranking, the biggest risers includeSingapore, which goes up 10 places to join the top 10 at seventhposition. Prime office rents rose 78% in Singapore last year inlocal currency, and, together with strong performances in India andVietnam, among other locations in the region, helped Asia Pacificto achieve the strongest regional growth, with rents rising 23%over the course of 2007.

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Arsh Chaudhry, executive managing director of Cushman &Wakefield in Southeast Asia, says that "rental growth in Singaporewas led by strong demand from the banking and services sectorscoupled with very limited supply of quality office space. Thedemand from corporations across most industry sectors is stillstrong for 2008 whereas supply will remain constrained until 2010.We will see a continuation of the upward trends in rents, albeit ata slower pace compared with 2007."

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Meanwhile, Moscow raises two places to join the top five rankingfor the first time, with prime occupancy costs now above those ofParis, which in addition has been overtaken by Mumbai. ElaineRossall, head of business space research & consultancy forCushman & Wakefield in EMEA, says "this change in the rankingis more about the rise of Moscow and Mumbai given that the rentallevel in Paris' CBD went up by 12% last year."

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The strongest riser in the global ranking is Oslo, which goes up14 places to 11th position. Helge Mork, CEO of Mork & Partners,the associate partner of Cushman &Wakefield in Norway notesthat "strong oil prices and low interest rates have helped fuel aneconomic boom in oil-exporting Norway over recent years. This hasfed through in higher office rents in the prime district of Oslo asdemand outstrips supply. Going forward, however, we expect thegrowth in prime office rents to increase at a much slower pace ashigher interest rates begin to filter through the system."

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Natalie Dolce

Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.