Survey: Tokyo, Zurich, Boston Among Top 10 in Office Costs
BOSTON (AP) _ Setting up shop in Tokyo could cost a whopping $186 a square foot, while the same amount of space in Kuala Lumpur takes the small sum of $12, says a new survey listing average prices of office space around the world.
The survey released Friday by Colliers International Property Consultants isn’t intended to make the Japan-bound change course for Malaysia, but it does offer a guide to budgeting space and funds, said Collier’s president Stewart Forbes.
″Essentially we want to get some sense of how different markets compare and to be able to provide that to clients who are increasingly active in a global market,″ he said. ″Somebody going from Boston to Tokyo needs to budget not on the basis of Boston rents, but on Tokyo.″
Rounding out the top 10 were: London, $152; Hong Kong, $102; Beijing, $78; Paris, $59; Sydney, $58; Zurich, $50; Boston, $48; New York, $47; Washington, D.C., $47; and, Moscow, $46.
Costs, gathered partly through consultants and partly through the 1,500 real estate professionals linked to Boston-based Colliers, include average rent and operating expenses such as electricity bills.
Half of the 54 cities surveyed had rents ranging from $20 to $34 per square foot.
The business of finding overseas locations for U.S. firms has boomed over the past five years, said Forbes.
″Real estate has always been sort of a local business, it’s almost been provincial in its outlook but as client needs became global so, too, have local real estate firms,″ Forbes said.
Jim Montanari, vice president of New York-based Cushman and Wakefield, also involved in overseas commercial real estate, said the survey’s top 10 matches his experience with finding office space, although he said he would probably place New York before Boston.
The biggest headache in renting office space abroad is learning to deal with fewer resources and accepting such constraints as an average 1 percent office vacancy rate in Tokyo, Montanari said.
″We’re used to having multiple choices,″ he said. ″People doing this for the first time, it’s sort of shocking,″ he said.
Forbes said the survey tried to stay away from broad averages by addressing the specific area of prime downtown locations for 10,000 square feet for a period of five years beginning May 1989.
Other findings of the survey included:
-U.S. cities at the bottom of the spectrum included Dallas (30) and Denver (32), both in the throes of overbuilding and energy-related recession shocks, at $13 and $12 a square foot respectively.
-Seattle, Kansas City and Jakarta tied for 27th at about $20.
-Rounding out the U.S. top 10 were Philadelphia, $41, Chicago, $40, Los Angeles, $31, Atlanta, $30, Baltimore and San Francisco, $29, Minneapolis, $28, Detroit, $26 and Fort Lauderdale, $25.