Splurging on office space

Office Space Across the World 2007 (OSAtW), a global report on office-occupancy costs produced by Cushman & Wakefield, named London's West End district as the world's most expensive office location.

According to the report, one square meter of prime office space in London's West End costs EUR 2,009 (zł.7,851) a year. This is 35 percent higher than the occupancy costs in Tokyo, at EUR 1,493 (zł.5,834), which this year has overtaken Hong Kong - at EUR 1,448 (zł.5,658) - to take second place.

"We have seen the fastest level of growth in occupancy costs in many of the world's top office locations since the upward turn of the property cycle in 2001," said Elaine Rossall, the report's author and head of business-space research and consultancy for Cushman & Wakefield in EMEA. "The driving force in most markets has been the financial services sector, which is in a buoyant mood given stock-market recovery, record levels of mergers and acquisitions, and more sophisticated global financial markets."

Warsaw's office space market was in 27th place (up from 33rd place last year) at EUR 381.20 (zł.1,488) per square meter per year.

Jarosław Prawicki from the office department at Cushman & Wakefield in Warsaw, said that office rents in Warsaw's city center will further increase in 2007. "This will be caused by the limited supply of new office buildings and unabated growth of demand," said Prawicki. "Rents outside the city center should stabilize at the current level, however delivery of new office projects in Mokotów at the beginning of 2008 should bring a small correction to rental rates."

Prawicki added that demand for office space is mostly generated by advisory and FMCG companies, as well as financial institutions.