HK, London & NYC Top Trophy Office Rents

BOSTON—New York City is third in the world and Boston is third in the US for trophy office rents, JLL said Friday. The firm's latest Premium Office Rent Tracker report, comparing like-for-like occupation costs across 35 markets in 31 cities worldwide, shows a tightening among the world's premier markets over the past year along with a significant uptick in rents in the priciest cities.

Hong Kong and London retained their spots atop the world's priciest premium office markets while New York replaced Beijing in the third slot. Boston rose to 11th place overall; the recently completed 888 Boylston St. there has set a new rental benchmark.

“New deliveries have pushed the high water mark for premium office rents in Boston this year,” says JLL research director Lisa Strope. “Boston's rise in the ranks is evidence of the strong economic momentum and the strength of the diverse tenant base that fuels the market. With limited availability in the new supply underway, rents in Boston's premier locations will not ease up as growing companies continue to seek these locations.”

Midtown Manhattan's total occupancy costs for premium office space rose to US$194, compared to $US171 last year. New York saw more than 10% rent growth in the trophy sector, outperforming both Beijing and Shanghai.

Across the continent, San Francisco fell by one position to eighth as rent growth there showed signs of softening. Boston moved up the ranking four spots and cracked the top 12 for the first time, while Washington, D.C. remained stable in 13th place.

“We continue to see upward rent pressure on the most coveted office space as vacancies shrink and the nation's gateway cities wrestle with how to best strike a balance between prestige and affordability,” says JLL international director Christopher Roeder. “Moderating rent growth in San Francisco is an example of the challenges these cities face.”

Although Hong Kong's position atop the list is not a new development, the size of its lead over the world's other premium-priced office markets is. Pricing on premium space in Hong Kong's Central submarket is now more than 50% greater than either London or New York, as companies from mainland China look to Hong Kong for top office space

Trophy office space in the Central submarket reached a new high of US$302 per square foot, including extras such as service charges and property tax up from US$262 a year ago. Prices were again pushed up by strong demand and an extreme supply shortage, leading to a vacancy rate of just 1.5%. Only Beijing's is lower, at 1.4%.

BOSTON—New York City is third in the world and Boston is third in the US for trophy office rents, JLL said Friday. The firm's latest Premium Office Rent Tracker report, comparing like-for-like occupation costs across 35 markets in 31 cities worldwide, shows a tightening among the world's premier markets over the past year along with a significant uptick in rents in the priciest cities.

Hong Kong and London retained their spots atop the world's priciest premium office markets while New York replaced Beijing in the third slot. Boston rose to 11th place overall; the recently completed 888 Boylston St. there has set a new rental benchmark.

“New deliveries have pushed the high water mark for premium office rents in Boston this year,” says JLL research director Lisa Strope. “Boston's rise in the ranks is evidence of the strong economic momentum and the strength of the diverse tenant base that fuels the market. With limited availability in the new supply underway, rents in Boston's premier locations will not ease up as growing companies continue to seek these locations.”

Midtown Manhattan's total occupancy costs for premium office space rose to US$194, compared to $US171 last year. New York saw more than 10% rent growth in the trophy sector, outperforming both Beijing and Shanghai.

Across the continent, San Francisco fell by one position to eighth as rent growth there showed signs of softening. Boston moved up the ranking four spots and cracked the top 12 for the first time, while Washington, D.C. remained stable in 13th place.

“We continue to see upward rent pressure on the most coveted office space as vacancies shrink and the nation's gateway cities wrestle with how to best strike a balance between prestige and affordability,” says JLL international director Christopher Roeder. “Moderating rent growth in San Francisco is an example of the challenges these cities face.”

Although Hong Kong's position atop the list is not a new development, the size of its lead over the world's other premium-priced office markets is. Pricing on premium space in Hong Kong's Central submarket is now more than 50% greater than either London or New York, as companies from mainland China look to Hong Kong for top office space

Trophy office space in the Central submarket reached a new high of US$302 per square foot, including extras such as service charges and property tax up from US$262 a year ago. Prices were again pushed up by strong demand and an extreme supply shortage, leading to a vacancy rate of just 1.5%. Only Beijing's is lower, at 1.4%.