office occupation costs to fall worldwide

In contrast, prospects of |an impending supply glut in |some markets and the wider adoption of flexible work practices - leading to reduced space consumption - will help drive occupancy costs down across Europe and Asia-Pacific.

Rather than referring to office rental costs, DTZ's analysis of office-occupancy costs is based |on the space allocated to each office-based employee across 114 business districts around the world.

More than three quarters (78 per cent) of the 114 business districts surveyed expect occupancy costs to fall in 2009. Only 3 per cent of the business districts are optimistic about an upturn in occupancy costs, while the remaining 19 per cent expect them to remain stable.

DTZ revealed that 61 per cent of North American business districts in the survey expected office-occupancy costs to be stable, while another 39 per cent predicted a significant decline.

In the Middle East and Africa, which were among the last to feel the impact of the financial turmoil on their office markets in 2008, 30 per cent of business districts expect some increase in occupancy costs, while the rest expect costs to fall throughout 2009.

All European and Latin American business districts surveyed expect occupancy costs to fall.

Similar sentiments are reflected in Asia-Pacific, where 76 per cent of the markets surveyed expect office-occupancy costs to decline, while 24 per cent expect them to remain stable.

DTZ's latest survey shows that Tokyo (Central five wards) |has overtaken London (West End) as the world's most expensive |office location on a cost-per-workstation basis. London (West End), which had been the most expensive office market on this basis |since 2001, when DTZ first compiled such rankings, was ranked fifth.

Only the Middle East and Africa region and Central and Eastern Europe registered positive annual growth in office-occupancy costs in 2008 (28 per cent and 11 per cent respectively). All other regions witnessed declines.

DTZ says that because space-utilisation standards per workstation differ in each business district, due to local practices and culture, a comparison of the office-occupancy costs based on the amount of space allocated to each employee gives a better comparison of the total costs of office occupation. The space not only takes into account the area used for a desk or a cubicle, but also common areas over which tenants or occupiers have exclusive use.