Hong Kong skyscrapers most expensive in the world


Capital values of  Hong Kong skyscrapers have hit $6,330 per sq ft, sitting 50 per cent higher than Tokyo, the city ranked 2nd in Knight Frank’s Skyscraper Index - www.knightfrank.com/global-cities-index-2015/specials/skyscraper-index  

Hong Kong’s large lead  in the index can be attributed to a variety of factors, such as the restricted geographic area of the city which results in developers having to convert air into ‘land’ and build upwards.

James Roberts, head of commercial research at Knight Frank, commented: “Skyscrapers are the Lamborghinis of the office world, as investors pay more to own these prestige and high quality buildings.

“Upper floors in skyscrapers command higher rents compared to office space in low rise buildings, due to the ego appeal of having an office that towers over competitors. Also, the panoramic views are a strong marketing tool, as a client can be taken into a meeting room offering an aeroplane perspective on the city below. Thus, the premium rents on offer justify the high prices investors will pay to own such a property.”

Traditionally, financial and professional firms have been the main occupants of skyscrapers, although recent years have seen a wider range of firms taking high rise space.

In London and San Francisco, IT giant, Salesforce.com, has taken offices in landmark skyscrapers. In New York, the Empire State Building is popular with tech firms. Insurance firms are also moving to skyscrapers and London’s recent tower completions, 20 Fenchurch Street and The Leadenhall Building, are majority let to insurers.

The most notable jump in the index comes from San Francisco, which has sprung ahead of four Asian cities to be ranked 5th in the global league table, having been placed 9th last spring. This acceleration in value has been driven by the rapid growth in California’s tech sector.

In Europe, London comes out on top, with capital values valued at more than double those in Paris or Frankfurt. London ranked fifth back in the spring, and the rise shows investor confidence in the future prospects of the UK capital’s office market, with its new wave of skyscrapers.

“Worth noting is recent evidence of hi-tech companies moving into skyscrapers. There are past examples of new industries during their ascendance phase choosing to take tower space for their offices, as an arriviste statement,” explained James Roberts.

“Examples include the 1931 Chrysler Building, during the inter-war boom for motoring, and the Pan Am Building in the 1960s, when air travel was first becoming a mass market. As the digital technology revolution continues, skyscrapers could offer a quick way of delivering large blocks of office space to keep pace with rapid headcount growth for such firms.” 


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