Central still the world’s most expensive office market, despite rental gap with mainland Chinese cities narrowing

Hong Kong’s Central occupancy cost growth slowed down to 0.6% only

August 07, 2019

HONG KONG, 07 August 2019 – Hong Kong remains the world’s most expensive office market, but the rental gap between Hong Kong and mainland Chinese cities has narrowed in the first quarter of 2019, according to global real estate consultant JLL’s, Premium Office Rent Tracker (PORT) report released today. Singapore has also climbed the ranks and placed 14th for the first quarter of 2019, compared to 16th place in 2018.

Hong Kong’s Central remains as the world’s most expensive rental market for premium offices for five consecutive years, according to JLL’s benchmark view on the best achievable office rent in the top 76 office markets in 65 cities around the world. For the first quarter of 2019, the submarket yet again topped the charts in occupancy costs – including rent, taxes and service charges – by a wide margin at USD 340 per sq ft per annum, compared to New York’s Midtown coming in second at USD 212 per sq ft per annum.

Beijing’s Finance Street climbed the ranks and placed 3rd, same with London’s West End in the global rankings with average occupancy costs increasing by 3.2%, growing from USD 189 per sq ft as at the third quarter of 2018 to USD 195 per sq ft in the first quarter of this year. The rate of increase outpaced that of Hong Kong’s Central, which increased by just 0.6%.

Similarly, other mainland Chinese cities also moved up in the rankings. Shanghai’s Pudong landed in the top ten, climbing up from 11th place last year to 10th place, with occupancy costs increasing 1.5%. Beijing’s CBD saw a 3.9% increase, climbing from 8th to 6th place in the rankings.

Shenzhen was the only Chinese city tracked that slid in the rankings, falling from 7th place at USD 155 sq ft per annum, to 13th place at USD 119 sq ft per annum.

The banking and financial services industry continues to lead demand for premium office space, accounting for half of the total demand recorded across all markets, and over 60% of the demand for premium office space with occupancy costs at over USD 100 per sq ft per annum.

Alex Barnes, Head of Markets at JLL in Hong Kong, said: “While Central’s high rents continue to grab headlines, the reality is that there has been minimal transactional activity recorded in this market over the past 6 months and rents have been held up by incredibly tight vacancy. For landlords, there is simply no need to dramatically reduce rents to fill the remaining pockets of vacancy. Rather, leasing activity has been largely focused in nearby districts like Quarry Bay, which sits outside the world’s ten most expensive rental markets and offers office accommodation that is at a significant discount against Central. With increased market uncertainty, it is clear that the bulk of tenant activity will continue to be focussed outside of Central, particularly in Quarry Bay for front office banking and finance and professional services and Kowloon East where most of the city’s new and attractively priced supply sits.”

Paul Yien, Senior Director of Hong Kong Markets at JLL, said: “Hong Kong remains one of the world’s most attractive financial hubs, the steady growth in demand for premium office space from Chinese banking and finance firms on the mainland has seen the rental gap over mainland Chinese cities narrow. The rental gap between Hong Kong and Singapore has also narrowed after Singapore’s occupancy costs grew 7.4% during the period. Singapore has climbing from 16th to 14th place in the rankings.”

Ken Tang, Head of Kowloon Markets at JLL, said: “In contrast to Central, Kowloon East has risen two places in the PORT rankings, from 31st to 29th, with occupancy costs up 3.6% over the past six months. The move up the rankings reflects the relative upgrading of the tenant base that has arisen from ongoing decentralisation. Looking forward, we expect Kowloon East to continue to move up the rankings, as premium office space continues to be highly sought after in areas outside of Central.”


In the latest update of JLL’s Premium Office Rent Tracker (PORT), we compare like-for-like occupation costs across 76 major office markets in 65 cities. This quarterly update for 2019 includes a further 4 markets from 2018, where we included 72 major markets in 61 cities of differing function and evolution.

Premium office rents refer to the ‘top achievable’ in units over 10,000 square feet (or approximately 1,000 square metres) in the premium building in the premier office district of each city. In tall buildings, the middle zone is used as the benchmark. The report excludes rents that represent a premium level paid for a small quantity of space or highly prestigious units where a significant premium applies.

Total occupancy costs are calculated by combining the net effective rent with additional costs (e.g. service charges, taxes).

Top ten most expensive office markets in the world:




Total occupancy cost

(USD/per sq ft/per annum)


   Hong Kong, China

   Hong Kong, Central




   New York, Midtown



   Beijing, China

   Beijing, Finance Street




   London, West End




   New York, Midtown South



   Beijing, China

   Beijing, CBD




   Silicon Valley




   Tokyo, Marunouchi




   Delhi, Connaught Place



   Shanghai, China

   Shanghai, Pudong


About JLL

JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. Our vision is to reimagine the world of real estate, creating rewarding opportunities and amazing spaces where people can achieve their ambitions. In doing so, we will build a better tomorrow for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of US$16.3 billion, operations in over 80 countries and a global workforce of over 91,000 as of March 31, 2019. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com.