Hong Kong’s skyscrapers are the most costly commercial real estate in the world, a new analysis using rental values and yields has revealed.
The inaugural active capital report by Knight Frank has recently stated that the average pricing for skyscrapers in Hong Kong has reached $8,000 per square foot. This is 60% higher than the average price for Tokyo’s tall buildings – and second on the list – where a square foot sets you back $4,900.
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Manhattan came in third with average costs per skyscraper square foot of $3,700, followed by San Francisco at $2,500 and London at $2,450.
Furthermore, the report highlighted the price issue by stating that Hong Kong developer Henderson Land recently paid an incredible $3 billion for a five storey car park. This shows once again the heightened state Hong Kong’s property market is in.
This sale alone sets – according to Knight Frank’s report – the world’s most expensive city even further apart from the rest and opens up new record levels of property pricing.
Andrew Sim is Knight Frank’s head of global capital market, and commented the findings:
“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.”
“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 continued.
“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 concluded.
