Hong Kong is the most expensive office market in the world, costing twice as much as the rest.

Office space in Hong Kong is more than twice as expensive as top commercial property in any other worldwide metropolis, according to property consultancy Knight Frank. hotels

Knight Frank analyzed capital values for premier offices in 32 locations as part of its 2015 forecast for global commercial property, finding that top Hong Kong office space is valued at 70,000 US$ per sq. m. This is much more than Singapore’s second-placed rate of 28,340 US$ per sq. m, and more than three times higher than the City of London’s rate.

The following are some of the most important worldwide office market estimates for 2015:
Ultra-high-net-worth individuals and state-owned corporations are leading a new wave of Chinese investment.
Japanese pension funds will diversify into international real estate.
Rents will rise as tenant demand for offices grows and availability decreases.
Investors will continue to flock to specialist property, and it will become more mainstream.

Despite recent high capital value growth and an uneven global recovery, Knight Frank predicts that cross-border investment will expand in 2015, as investors seek greater returns and diversification outside of their home markets.
Given the enormous weight of money targeting real estate, Knight Frank predicts worldwide investment volumes will climb by at least 10% to above US$700 billion in 2015. The final figures for 2014 is projected to reveal that global commercial property investment volumes exceeded US$600 billion, a 15% increase over 2013.
“The availability of land and land values are the basic problems that are driving rents and capital values in Hong Kong and Singapore, in particular,” said Darren Yates, Head of Global Capital Markets Research at Knight Frank.
These areas have a limited supply of land, high population densities, and a large number of successful multinational enterprises that can afford to pay higher rates.”
“Real estate capital markets have become increasingly buoyant and detached from occupational patterns, which has paralleled the unevenness of the global recovery,” Yates continued.
The focus of investors thus far has been on openness and liquidity, which has benefited gateway cities like London, Paris, and New York. However, demand is growing for cities in the second and third tiers, where stock competition is less strong and potential profits are larger.”
The findings of a survey of renowned investment brokers conducted by Sumitomo Mitsui Trust Bank on how the main Japanese pension funds will handle the real estate market in the next years are also included in Knight Frank’s research. According to the poll, more than 70% of Japanese pension funds expect they would increase their real estate exposure in the next one to two years, citing “steady income” as their primary goal, followed by the ability to diversify.
North America is expected to be the most popular destination for Japanese pension funds looking to invest abroad. Other Asian markets (18.8%) and European cities (12.4%) are projected to be far less popular at first.
“With the biggest Japanese pension funds collectively managing over US$2 trillion, even a minor allocation to property is likely to have a significant impact on global real estate markets,” Yates said.
The 15 largest Japanese pension funds would invest $100 billion in international property if they only put 5% of their assets into it. This is unlikely to happen overnight, but it will almost certainly have a significant impact over the next two to three years.”