Beijing office rents 'rise 75%' to top New York

Office rents in Beijing are more expensive than New York after rising 75 percent last year as China's rapid economic growth sparked strong demand, an international real estate company said. The Chinese capital is now in fifth place for the world's most expensive office space, with New York's midtown Manhattan coming sixth, Cushman & Wakefield said in its 2012 rankings released this month. The top spot was captured by the southern Chinese territory of Hong Kong, followed by London and Tokyo. The Russian capital Moscow was fourth. "The unprecedented urbanisation process in China and strong economic growth will continue to drive up the demand for office space," Andy Zhang, managing director of Cushman & Wakefield China, said in a statement. China has moved to curb property speculation for more than a year, but government moves have been largely aimed at housing prices and not the office and commercial sectors. In Beijing, occupancy cost was an average $130 per square foot (0.09 square metres) annually, higher than the $120 for New York, according to the real estate services firm. The global ranking only covers the most expensive city in a country, so China's commercial hub of Shanghai was not ranked. However, Shanghai had rental growth of 27 percent last year, the second fastest in Asia behind Beijing. Zhang said rental growth in the two cities was expected to slow later this year, but that lack of new supply in future would keep rents high. "With a single-digit record low vacancy rate and not much quality supply foreseeable in the coming years, we expect Beijing and Shanghai to maintain the landlords’ market position in 2012," he said. China's policies to bring residential prices down include bans on buying second homes and hiking minimum down-payments for home buyers. Some property developers have turned to commercial and office projects following the curbs, industry officials say.