Occupancy Costs Rise Globally

NEW YORK CITY-CB Richard Ellis Research’s semi-annual Global Market Rents survey of 173 markets finds that occupation costs for prime space have continued to rise. Of the markets surveyed, occupancy costs increased in 119 and decreased in only 24.

Much of the global rental growth can be seen in Asia, led by India and China. “China is a strong growth area,” CBRE’s chief economist Steven Dunn tells GlobeSt.com. “And it’s growing so fast in the office services sector.”

With a 69% increase in occupation costs in the last 12 months, Mumbai’s Nariman Point submarket has seen the greatest rent appreciation. At $93 per sf, the area broke into the top 10 most expensive markets. India, Dunn points out, is populated by more than just call service centers. “There is a middle class that needs to be serviced.” Dunn adds that legislative changes expected this year could bring about a lot of development opportunities for foreign investment. “That demand for space is not going to go away soon.” Elsewhere in Asia, Hong Kong occupancy costs jumped 50% to $102 over the last year.