London's West End neighborhood has some new bragging rights, of sorts. It's the most expensive place for office real estate in the world.
According to a survey by Los Angeles-based real estate broker CBRE Group, West End's occupancy costs--which include rent, service charges, and local taxes--climbed 14 percent this year to a whopping $259 per square foot. The area topped Hong Kong, which had been the leader in the broker's previous semi-annual survey. Hong Kong office space cost $234 per square foot, down nearly 5 percent from last year.
Bloomberg reports that West End's rents are steadily climbing due to a combination of limited supply, high demand, and a strong economy. With the U.K. economy on the upswing, hedge fund firms are competing for space in the area. Regulations protecting historic buildings against demolition and a ban on new high-rise buildings has created a shortage of office space, also helping the neighborhood's rents to soar, Bloomberg reports.
Asia claims four out of five of the priciest office space markets. Beijing's Finance Street, Beijing's Central Business District, and Hong Kong's West Kowloon round out the top five.
Global occupancy costs climbed 2.2 percent in 2013 through September, with the Americas experiencing the greatest jump, according to the CBRE survey.
"The growth of occupancy costs for prime office space in the past year underscores that even in a slowly recovering economy, demand for the best space in the best locations continues to be strong," Raymond Torto, the global chairman of CBRE Research, said in a press release.
Is working in Piccadilly Circus worth $259 a square foot? Let us know in the comments below.