Ever wondered why skyscrapers keep popping up like daisies in the middle of the worst economic crisis in 70 years? Wonder no longer. Property consultancy Cushman & Wakefield (C&W) reckon that, as of last autumn, London was home to the most expensive office property in the world.
The firm’s latest report on the ever exciting global real estate market found that commercial property in the West End was now going for an average of $171 (£111) per square foot. That’s more than 20% higher than the nearest rival Hong Kong ($133), and way out ahead of some of our other competitor cities. In Paris and Tokyo, you’re looking at around $100 per square foot, while offices in midtown Manhattan are a positive steal at $73.
What’s more, just 4.2% of that office space is currently looking lonely and tenant free. In ghost town Los Angeles, by contrast, as much of a fifth of the offices are standing vacant.
These figures only apply to the West End, of course: over in the City and Docklands, vacancy rates are rather higher, at 8%, and rents a slightly less terrifying £55 per square foot. (We’ve been unable to find up to date figures, so these date from last spring, but we’re confident they won’t have doubled in the mean time.)
But the high prices in our central business district, C&W says, explain the growing number of companies setting up shop in more marginal areas like Clerkenwell, Southwark, King’s Cross and Shoreditch. It’s also, we suspect, the main reason why those builders keep on building.