New York prime office rents soar according to latest skyscraper index

Skyscraper prime office rents in New York have dramatically increased by 20% to outperform the leading Asian skyscraper cities, new data shows.

In New York they have risen to $150.00 per square foot since July 2014, however, Hong Kong still boasts the world’s highest skyscraper office rents at $250.50 per square foot.

The data from the latest Skyscraper Index from Knight Frank and Newmark Grubb Knight Frank which ranks the world’s cities as centres for high rise offices and homes, puts New York in second place with Tokyo in third with growth of 4.8% to $124 per square foot.

In fourth place is London with a 7.7% rise to $108.75 per square foot, followed by San Francisco at $97, a rise of 2.1%. Singapore comes next with $94.25 and growth of 6.1%, then Sydney at $91.75, a rise of 0.8%, Moscow with a fall of 3% to $90 and Los Angeles in tenth position at $73, a rise of 10.6%.

The report points out that New York rental values have boomed as skyscraper development has increased, with towers proving popular workplaces for the expanding digital and creative firms in the city, as well as financial and professional firms. However, Hong Kong’s large lead in rents reflects a low vacancy rate and constrained CBD area.

‘A high quality office environment is an essential part of building a business. With the economy improving, firms want offices that provide an inspiring place to work and demonstrate they value their employees,’ said William Beardmore-Gray, head of global leasing services at Knight Frank.

‘Today the rent paid on an office workstation is usually less than the fee paid to a head hunter to replace a person who leaves. So companies want to use their offices as a way to make staff feel they are valued and important. You achieve that when you put workers in the building that appears as the backdrop during the stock market report on the evening news,’ he added.

James Roberts, chief economist at Knight Frank, pointed out that western cities are now eroding the lead of big Asian centres in tower office rents. For premium floors with views rents are rising in Hong Kong, but they are increasing much faster in New York. Similarly London is closing the gap on Tokyo.

‘Economic growth prospects for this year favour locations like New York and London, so I see these cities stepping up competition on the Asian centres. Many people like to say that the balance in the global economy is shifting from west to east, but certainly skyscraper rents provide another indicator that shows this is not entirely the case,’ he said.