In the latest Skyscraper Index, a report which examines the rental performance of commercial buildings more than 30-storeys across the world, showed that rents in skyscrapers in London rose 9.7 percent during the second half of 2015.
Real estate firm Knight Frank reported that London also topped the table for rental growth in the previous Skyscraper Index, which covered the first half of 2015.
This far outstripped the growth in rents seen in other global cities, with rents in skyscrapers in San Francisco and Hong Kong rising 4.76 percent and 3 percent respectively over the same period.
Singapore was the only global city where skyscraper rents significantly decreased during the period, with the 4.75 percent drop attributed to over-supply and diminishing occupier confidence as a result of the slowdown in the Chinese economy.
Rents in Hong Kong’s skyscrapers continue to be the highest in the world by some margin, reaching US$ 263 per sq ft in H2 2015. New York retains its second position, where skyscraper rents are currently US$ 155 per sq ft, with Tokyo third (US$ 129 per sq ft).
There has been much debate around the future of London’s skyline, but the rental performance of skyscrapers points to the fact there is huge demand for space in landmark, tall buildings and we expect the upward pressure on rents to continue.
For the second time in 12 months, London is the fastest growing office tower market in the world, due to its diversity of occupier demand and constrained supply.
In the U.S., the rapid expansion of the tech sector is underpinning rental growth for towers in cities like San Francisco and Boston.
Interestingly, Mumbai’s emergence as a top performer has benefited from growth in tech, as it surpassed financial and business services as the top occupier of office space in the second half of 2015.
