Hong Kong’s ‘nose bleed’ skyscraper office values beat Manhattan

Bloomberg

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Commercial and residential buildings sit in Hong Kong, China.

Investors are willing to pay more than twice as much for offices on the upper floors of Hong Kong skyscrapers than for the equivalent space in Manhattan, broker Knight Frank LLP said.
Workspace at “nose bleed” level in skyscrapers, which commands the highest rent, is selling for $69,222 a square meter in Hong Kong compared with $42,283 in second-ranked Tokyo and $25,740 in Manhattan, the London-based broker said in a report today.
Rents in central Hong Kong will rise 15 percent this year as demand from banks increases, Credit Suisse Group AG analysts led by Joyce Kwock forecast in a January report. Higher rents usually result in rising property values.
In Manhattan, financial companies are reducing their space needs or cutting costs and technology and media firms are favoring older buildings, limiting rent gains. JPMorgan Chase & Co., the biggest U.S. lender, is moving about 2,000 employees to Brooklyn’s MetroTech Center after reviewing its property holdings, a person with direct knowledge of the plan said.
Singapore, the world’s costliest city to live in, and London are the next most expensive locations and may swap places next year, James Roberts, head of commercial property research at Knight Frank, said in the statement.
The U.K. capital has “renewed confidence thanks to better than expected economic growth and rising rents in the office market,” Roberts said. “Given the economic uncertainty in emerging markets, in 2014 we will probably see some of the Asian cities slide down the table.”

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