The cost of renting offices in Sydney ranked as the ninth most expensive in the world for 2017, according to Cushman & Wakefield’s report.
London’s West End used to be the most expensive city for renting offices, but Hong Kong relegated the European city this year. The average annual cost for each workstation in Hong Kong amounted to $27,431 by June 30, the report noted.
Top 10 Markets
Cushman & Wakefield based its rankings on a survey of occupancy prices in 214 markets in 60 countries. Aside from Hong Kong, the Tokyo market was the only Asian city to join the top 10 with more than $18,000 of average annual cost for each workstation.
The city of Fairfield in Connecticut and San Francisco completed the top five with over $17,000 and $16,000 of average expenses, respectively. In Sydney, investors should take note that the rental performance in the city outweighs the cost of rent. Based on a JLL index, the market outranked any other city in the world in terms of prime rental growth.
Many developers have taken advantage of a strong office market in Sydney by launching more projects. Other ventures include a shared office space franchise, which has become popular among corporate tenants that seek to reduce expenses.
JLL’s Global Office Index during the third quarter showed that city’s prime rents rose 30.1% year over year. Melbourne ranked next with 17.3% increase. According to JLL Australia’s head of office leasing Tim O’Connor, the growth of prime rents in Sydney have been consistently at the top spot for the last five years.
Any kind of investment entails certain risks. While Sydney may be an expensive market for cities to set up offices, the pace of growth for rental rates makes it a worthwhile venture.