The composition of the Top 10 is largely unchanged over the last 12 months; New Delhi is the  only new entrant. Connaught Place, often described as the heart of Delhi, moved up from 17th place a year ago to become the second Indian city in the Top 10, joining Mumbai which itself moved up from 7th to 5th place. With Moscow ranked 6th on the list, the growing importance of the major emerging economies is clear. Markets in the Middle East have become increasingly more expensive, with Dubai just outside the Top 10 and Abu Dhabi rising from 50th to 17th over the last twelve months.

Office rents in London's West End were around double those paid in Moscow, Paris and Dublin -- Europe's most expensive office markets outside London, the data showed.

According to the report, London’s West End holds the title of most expensive city, with rents at $241.22 per sf. This is followed by London’s CBD (Central Business District), at $165.72 per sf, Tokyo’s inner central at $162.09 per sf, Tokyo’s outer central at $143.52 per sf, Mumbia (Bombay), India at $138.41 per sf and Dublin at $106.48 per sf . The only US city to make the top 50 most expensive cities list was Midtown Manhattan. This part of the city ranked 21 with an average rental rate of $69.44 per sf.

Overall, the EMEA (Europe, Middle East and Africa) region dominates the Top 50 with 33 markets, followed by Asia Pacific with 11cities; North America and Latin America have three representatives each. In part this is influenced by the methodology used in the United States, where costs represent an average for Grade A space in the market concerned, whereas elsewhere the measure reflects typical costs for the best buildings and locations in the market. However, it is still notable that costs are significantly higher in many parts of Europe, Asia and the Middle East than they are in most North American cities.

The other factor that has influenced movement in dollar-denominated occupancy costs is changes in currency exchange rates. The weakening of the US dollar in recent years has had a significant impact on the rankings. As the chart shows, most international currencies have strengthened against the dollar, raising occupation costs in dollar terms. Thus office occupation costs in London rose 15% during the year in local currency, but by 30% in US dollar terms. Since the start of 2002, rents expressed in dollars have risen by between 40% and 70% in the UK, Europe, Canada and the Pacific region simply as a result of shifting exchange rates. This is over and above the strong growth that has been seen in local occupation costs in many markets over the same period.

Source: CBRE

Global Office Rents Experience Strong Growth

Abu Dhabi, in the United Arab Emirates, scored the #1 position in the global rankings of fastest growing office occupation costs in the 12 months to the 1st quarter 2007. Rents in the oil-rich capital grew a staggering 103%. Ninety percent of the 176 office markets monitored in Global Market Rents showed positive growth in the 12 months to the first quarter 2007 (change measured off local currencies). The Top 50 fastest growing markets enjoyed average growth of 28%, while the Top 10 increased an impressive 58% on average.

While the economies of Asia are still well represented in this Top 50 ranking, the more established regions of North America and Europe are starting to see more growth, from more markets.

Despite concerns of a stalling US economy, there are more office markets from North America (16) in the Top 50 (including 3 in the Top 10) than from any other global region.

North America’s rent growth performance is headed by oil-and-gas-rich Edmonton, Canada, with a #4 ranking, where rents grew 60%, while in West Palm Beach, Florida rents grew 45%, to rank the market at #7 worldwide. New York Downtown slotted in at #10, where occupation costs increased 43%.

After many years in the economic doldrums, many parts of Europe are starting to show signs of life. Eleven markets in Europe made the Top 50 rankings in this reporting period; another three if you include Eastern Europe (categorized separately here to facilitate comparative analysis). Most notable in the region was one of those Eastern European cities, Sofia, where rents jumped 63% in the last year to put the Bulgarian capital third in the overall global rankings. The other European city to make the top ten was at the other end of the region, Belfast, where rents grew 43%, to come in at #9.

Market fundamentals in Asia’s business hubs are being boosted by an influx of international companies, as well as expansion of local corporations. Ten Asian markets made it into the Top 50 global ranking this time around, including three in the Top 10: New Delhi in #2 with rent growth at 79%; Singapore was #5, with a 54% increase; Mumbai was #6, having experienced 45% rents growth over the last 12 months.

The Pacific Region had just two markets in the Top 50; one in the Top 10 and one just outside (Brisbane CBD at #11). Perth CBD made it to eighth in the global ranking, with a rent increase of 44% over the 12 months, fuelled by a booming resources industry and vacancy below 1.0%.

While Latin America had four markets in the Top 50 (Caracas, Venezuela #26; Bogotá, Colombia #32; Buenos Aires, Argentina #33; and Quito, Ecuador #44), none featured in the Top 10.