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Expensive office

London's St James's district the world's priciest office area

St James's in London is the world's most expensive office area, according to a survey by real-estate services company Jones Lang LaSalle.

The next most expensive office districts are Central in Hong Kong, Finance Street in Beijing, Rue du Rhone in Geneva, and Menlo Park in Silicon Valley, California.

Jones Lang LaSalle reports that the world's 12 premier office districts have witnessed higher competition by companies for space, driving rental prices to new highs.

The company's new list of the "World's Most Expensive Office Areas" reflects a variety of global and regional economic trends and highlights the key factors companies consider when seeking premier office space.

All 12 of the office districts are within the world's most internationally connected and easily accessible cities, which are home to the greatest number of top global corporate headquarters, the world's top talent and the highest net-worth individuals.

St James's in London offers an average price of US$194 per square foot (Bt68,450 per square metre) per year. Home to world-leading hedge and sovereign wealth funds, and niche wealth and investment managers, the district personifies the West End's unparalleled accessibility, luxury amenities and proximity to clients.

Meanwhile, Central in Hong Kong offers an average price of $162 per square foot per year. Complemented by first-class hotels, luxury retail, excellent transport links and interconnecting walkways, Central is the location of choice for the city's banking and finance community.

Beijing's Finance Street offers an average price of $137 per square foot per year. A Beijing submarket planned specifically for highest-tier financial institutions and major state-owned enterprises, Finance Street also attracts global investment banks and insurance companies.

Rue du Rhone in Geneva, which offers $116 per square foot per year, is the city's prime location for private wealth management, banking and luxury retail brands.

Menlo Park in Silicon Valley, California, with prices averaging $111 per square foot per year, is the epicentre of the technology universe, with its Sand Hill Road home to many venture capitalists.

Office space in Moscow's Kremlin area, which fetches $1,150 per square metre per year, is popular with Russian and international finance and legal tenants. New construction is tightly restricted, which has helped further boost the value of office space in the area.

Fifth Avenue, in midtown Manhattan, New York, offers $104 per square foot per year. Consistently ranked among the most expensive shopping streets in the world, Fifth Avenue is also home to numerous hedge funds looking for top-quality midtown space.

Raffles Place/Marina Bay, fetching $103 per square foot per year, is the heart of Singapore's financial district. It is served by a world-class subway system and is a vibrant environment for work, living and play.

Golden Triangle, in the Champs Elysees area of Paris, offers $99 per square foot per year. The center of Paris's tourism and retailing is also an office hub for high-value-add businesses including international law firms and banks, and corporate tenants seeking accessible, high-quality buildings in close proximity to clients.

Finally, Tokyo's Marunouchi fetches $ 98 per square foot per year. Marunouchi, located on the west side of Tokyo station, is a long-established office precinct where the lower floors of buildings typically house luxury retail, and higher floors are office space.

Financial sector drives demand

Despite the upheavals in financial markets in recent years, Jones Lang LaSalle's research points to the financial sector as the primary demand-driver in these top locations.

A general lack of available space adds an aura of exclusivity in these supply-constrained areas, luring emerging companies in other sectors, as well retail, hospitality and tourism attractions.

The company's director of research, Jeremy Kelly, said the same set of global cities would continue to dominate the list in the years to come, although the order would change with sector-driver market conditions and the continued rise of the technology and mobile sectors.

For example, Silicon Valley will continue to climb the list as tech-driven demand continues to push up rental rates.

"With premium rents in the CBDs [central business districts] of a number of US cities now increasing, we can expect to see additional US markets ranking among the most expensive over the next 24 months," he said.

Market dynamics can also have the converse effect, however.

"Tokyo was the most expensive market for office space in the world for many years," he added, "but it was hit hard by the global financial crisis and has been surpassed by other Asian power cities."

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