Occupancy costs in Tokyo have dropped 16% over the last quarter. Similarly, the report claims Tokyo's occupancy costs have decreased from $119.03 per sf in the third quarter of 2001, to $99.87 in the fourth quarter of 2001. Combined with currency deflation, these two indicators should make the city financially attractive to multinational investors.
"This decrease of the yen against the US dollar is a primary reason that now is a good time for US multinational companies to capitalize on Tokyo real estate," Paula Forys, assistant research director at Cushman & Wakefield, tells GlobeSt.com. The Yen currently stands at close to 130 against the US dollar.
Cushman & Wakefield executive vice president, international operations John B. Coppedge III concurs, predicting that available space will increase in 2003. "Given the drop in rent, combined with the amount of space coming on the market next year, this is a prime time to enter Tokyo at an affordable price."
In the US, Midtown Manhattan has the highest occupancy rate, at $62.70 per sf, placing it seventh in relative occupancy cost worldwide. The global report shows San Francisco, the ninth most expensive market, had the most dramatic drop, to 21st place. That city has been severely impacted by the dot-com crash due to heavy reliance on the high-tech economy.
London's West End ($144.29) is the most expensive market in the 54-region study followed by the entire city of London ($124.00), Tokyo ($99.87), Hong Kong ($76.55) and Paris ($69.66) rounded out the top five.
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