According to Savills in its latest quarterly Prime Office Costs report, gross prime office rents in major cities around the world have risen 3 percent in the past year (second quarter 2023 to second quarter 2024) while tenants’ all-in net effective costs (rent plus fit-out costs) have risen 3.8 percent, as the structural trend toward seeking high-quality, premium office space continues. London (West End), Hong Kong, and New York (Midtown) remain the top three locations of the 35 markets Savills examined, compared to first quarter 2024.
Savills says that the intense bifurcation in the commercial real estate market in the United States and Canada, with prime buildings seeing intense occupier demand for limited stocks despite high overall availability in class-A buildings across North American markets more broadly, contributes to such a high premium, and that it is likely to continue to grow. In Asia Pacific (APAC), meanwhile, the prime premium stands at 33.7 perce
