A dramatic fall in the cost of renting office space means that Dublin is now ranked 44 out of 50 world cities in terms of business property rental.
Newly-released figures from Knight Frank show that Central Hong Kong overtook London’s West End as the location with the highest prime office rents in the world during 2011.
Dublin’s prime office rents have dropped substantially; it ranks as the 44th most expensive out of 50 cities in 2011 compared to 28th in 2010. The average prime office rent per sq. metre for the year was €325. This is just one euro above the cost for Madrid.
Dublin’s position is just above Madrid and below Riyadh in Saudi Arabia, which retained its 43rd position from the previous year and ahead of Madrid, San Francisco, Leeds, Warsaw, Brussels and Vienna.
Hong Kong’s rise to the top of the ranking is a result of rapid rental growth in the first half of 2011. While there was evidence that rents had peaked in the second half of the year, Grade A rents in Central stood at HK$1,046 per sq m per month (c.UK£97.11 per sq ft p.a.) in Q4, 28pc up on 12 months earlier. However, with office demand weakening, Grade A rents are forecast to soften in 2012.
Prime office rental growth in London (West End) slowed in 2011, after an exceptional increase of 31pc was recorded in 2010. Prime office rents rose by 9pc in H1 2011, to UK£92.50 per sq ft p.a., but remained unchanged in H2 with leasing activity remaining fairly subdued due to wider uncertainty in the UK economy. Tokyo fell from second to third place in the ranking, and rents in the Japanese capital continue to come under moderate downward pressure as cautious tenants seek to reduce their occupation costs.