London’s skyscrapers still command highest rents in Europe despite Brexit

06 October 2017

Saudi Arabian sky scrapers continue to command premium rents with Riyadh and Jeddah ranking at the 20th and the 22nd position respectively when compared to major cities worldwide

The 2018 Global cities report examines the rental performance of commercial buildings over 30 storeys.  It identifies that that prime rents in London’s skyscrapers remained at $110 per sq ft in the first half of 2017, approximately double the rents in tall buildings in Paris ($58 per sq ft) and Frankfurt ($54 per sq ft).

London is the only European city to make the global top ten in the ranking. Office rents in London’s skyscrapers are the highest in Europe as companies continue to pay a premium for space in the city’s tallest buildings, according to Knight Frank’s Global Cities 2018 report.

Hong Kong’s skyscrapers continue to command, by some margin, the highest rents in the world at $304 per sq ft, followed by New York and Tokyo at $162 per sq ft and $140 respectively. San Francisco, where rents have risen to $117 per sq ft, completes the top five, ahead of London at $110 sq ft..

Prime rents in Riyadh’s office market are at an average of $40 per sq ft, placing the city in 20th position when compared to prime rents across key global cities while Jeddah ranks 22nd on the same scale with prime rents averaging $33 per sq ft.

The prime office market in Riyadh has been dominated by a lack of supply in recent years with key assets such as Kingdom Tower and Faisaliah Tower enjoying close to 100% occupancy. In Jeddah, the supply side dynamics for prime commercial office space are equally constrained.  This looks set to be reversed in light of the Public Investment Fund’s (PIF) recently announced plans for the redevelopment of the Jeddah Corniche will include prime commercial office stock set within a high quality mixed use scheme.

Stefan Burch, General Manager Saudi Arabia and Partner said: ‘The Saudi Arabian market has been characterized by a lack of prime space, with many occupiers owning their premises. As a result, occupancy in headline schemes is high. Key to the development of the commercial office market are landmark mixed use projects such as King Abdullah Financial District (KAFD) and the Jeddah Waterfront which, when complete, will dramatically change the dynamics of the market by offering a best in class mixed use product’

ENDS

Skyscrapers Index

 

Prime office rents for upper floors in skyscrapers - Q2 2017

 

 

 

Rent (US$ / sq ft / per annum)

1

Hong Kong

$304

2

New York (Manhattan)

$162

3

Tokyo

$140

4

San Francisco

$117

5

London (City)

$110

6

Sydney

$107

7

Boston

$77

8

Shanghai

$67

9

Singapore

$66

10

Beijing

$66

11

Chicago

$62

12

Paris (La Défense)

$58

13

Toronto

$58

15

Melbourne

$56

16

Mumbai

$56

14

Frankfurt

$54

17

Los Angeles

$45

18

Dubai

$44

19

Taipei

$41

20

Riyadh

$40

21

Madrid

$39

22

Jeddah

$33

23

Manilla

$33

24

Seoul

$30

25

Kuala Lumpur

$23

* Excludes exchange rate effects; conversion to US$ based on 30 June 2017 rates

Source: Knight Frank, Newmark Knight Frank, Sumitomo Mitsui Trust Research Institute

Note: Upper floors is defined as above the regular skyline, thus offering panoramic views, but excluding the very top floors.

Further data available upon request

For further information, please contact:

Andrew Scorgie, FTI Consulting:                                      andrew.scorgie@fticonsulting.com+44 (0) 20 3727 1458

Ellie Perham-Marchant, FTI Consulting: ellie.perham-marchant@fticonsulting.com +44 (0) 20 3727 1249

Olwen Morris-Jones, Corporate Communications: olwen.morris-jones@knightfrank.com +44 (0) 20 7861 1738

Notes to Editors

Knight Frank LLP is the leading independent global property consultancy. Headquartered in London, Knight Frank has more than 14,000 people operating from over 413 offices across 60 countries. These figures include Newmark Grubb Knight Frank in the Americas, and Douglas Elliman Fine Homes in the USA. The Group advises clients ranging from individual owners and buyers to major developers, investors and corporate tenants. For further information about the Company, please visit www.knightfrank.com.

Please visit www.knightfrank.com/globalcities