According to Knight Frank’s latest Global Outlook Report, Hong Kong will retain its title as the world’s most expensive office market despite rents being forecast to decrease in 2019. Hong Kong Island rents will remain well above the long-term average, by nearly 24%.
Melbourne and Sydney will see the largest rental growth in 2019 with rents rising 10.1% and 8.6% respectively. Both are experiencing tight supply in their office markets due to employment growth and relatively low levels of development completions in recent years.
Five U.S. cities made the top 30 list: San Francisco, New York, Boston, Washington DC and Los Angeles.
James Roberts, Chief Economist, Knight Frank commented, “We believe there is a compelling global case for continued rental growth across the global cities. Tight development pipelines over several years have created leasing supply crunches, particularly for offices and logistics property. This is coinciding with stronger occupier demand, particularly from the fast growing tech sector. We expect these improving expectations on rental growth to give more investors the confidence to make leveraged buys particularly given the supply problems found across global occupier markets.”