Tokyo Is World's Most Expensive Office Market

Tokyo has become the most expensive office market in the world despite recording a sharp fall in office rents, a study has found.

Real estate adviser Cushman & Wakefield put the cost of opening an office in Japan's capital at $190 per square feet per year. It replaces Hong Kong, where costs have slid to $160 sq ft per year.

London's West End took second place with costs of $161 per sq ft per year.

The world's leading cities have suffered an unprecendented fall in demand for office space, Cushman & Wakefield said, contributing to the first global fall in office rents since 2003.

The largest prime office rental falls included all of the key cities of Asia Pacific with Singapore, Hong Kong and Tokyo, recording falls of 45%, 35% and 21%, respectively.

Kiev and Dublin were the biggest losers in Europe, while Boston, San Francisco, Seattle and New York recorded the biggest falls in the U.S.

The outlook for 2010 however is more positive," Cushman & Wakefield said. "As major economies return to growth, demand for office space from corporates is likely to once again increase and reduce supply."

"The second half of 2010 will be one of recovery and cautious optimism from both landlords and occupiers," the firm added.

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