On the basis of a new analysis taking into account the rental values and yields, the international real estate advisory company Knight Frank has found that high-rises in Hong Kong are the most expensive commercial real estate in the world. Pricing for skyscrapers in Hong Kong has reached $8,000 per sqft, over 60% higher than the towers in Tokyo at $4,900 per sqft.
Manhattan occupies third place with price at $3,700 per sqft, followed by San Francisco at $2,500 per sqft and then the City in London at $2,450 per sqft.
The report points out that Hong Kong developer Henderson Land had to recently pay $3 billion for an old five storey car park, indicating the hyperactive state of Hong Kong’s property market. The price was a record lump sum for Hong Kong and a record also per square foot and Knight Frank says that the sale sets the world’s most expensive city even further apart from its rivals.
‘For the first time we have comparatively analysed the capital value of the world’s skyscrapers, which are seen by many as a bell weather for the commercial property market as a whole,’ said Andrew Sim, head of global capital markets at Knight Frank.
‘Pricing is highest in Hong Kong which reflects the world’s highest skyscraper rents, and the lack of available land for future development. Similarly, pricing in major financial centres such as Shanghai, Singapore, Manhattan and London is supported by the high level of demand for space in these buildings from financial services businesses, in particular,’ he explained.
‘However, pricing for tall buildings in Sydney, Melbourne and Taipei is likely to move more rapidly in the next two years, and we expect to see investors in search of trophy assets looking beyond the major financial centres,’ he added.