Office rents in London’s skyscrapers are the highest in Europe as companies continue to pay a premium for space in the city’s tallest buildings, according to Knight Frank’s Global Cities 2018 report.
The report, which examines the rental performance of commercial buildings over 30 storeys, shows that prime rents in London’s skyscrapers remained at €93.6 ($110) per ft² in the first half of 2017, approximately double the rents of tall buildings in Paris and Frankfurt. London is the only European city to make the global top ten in the ranking.
Hong Kong’s skyscrapers continue to command, by some margin, the highest rents in the world at €258.6 ($304) per ft², followed by New York and Tokyo at €137.8 ($162) per ft² and €119.1($140) respectively. San Francisco, where rents have risen to €99.5 ($117) per ft², completes the top five, ahead of London.
Knight Frank’s analysis shows Toronto’s skyscrapers are experiencing the highest rental growth, rising 11.9% in the first half of the year to €49.3 ($58) per ft². Rental growth was also evident in North American cities New York (1.8%), San Francisco (3.5%) and Chicago (1.6%), as the recovering economy and low unemployment rate translated into increased business confidence and demand for space in trophy buildings.
James Roberts, Chief Economist at Knight Frank said: “That London still commands the highest skyscraper office rents in Europe, despite the Brexit uncertainty, is a statement of its resilience and popularity as a business location. Firms are willing to pay more to be in London skyscrapers than those in Frankfurt because they view the UK capital as a more important international hub."
