London’s prime office space is no longer the most expensive in the world, new research shows. The report highlights the effects of the recession, which has disproportionately affected the financial services sector.
As a result, areas with high concentrations of banks and other finance industry companies have found their commercial property rental rates falling faster than elsewhere. London’s West End is one such location that has been hit.
Measured in US dollars, West End office space went for almost $300 per square foot a year ago, whereas today it averages just over $170 – around £105 at the current exchange rate. Office space in Tokyo’s Inner Central District averages $184 (£112). Moscow’s office space is close behind London’s at $171.
The significant falls in costs have meant that many companies are now able to secure long-term deals at extremely competitive rates.