Global economies have been harshly affected by three major factors; soaring food prices all over the world, the disruption in the financial and credit card markets within North America and the massive increase in energy prices for net consumers.

Despite all the impact these events have had on the global economy, the U.S. posted a 0.6% annualized rate of GDP growth in the first quarter this year. Naturally, all these factors affect the office market worldwide. CB Richard Ellis has released their latest report of Global Market Rents that indicates office rents and occupancy costs worldwide. Like last year, London’s East End is topping the list once again for being the most expensive markets.

The Five Most Expensive Office Markets,

(ranked by occupation cost in US$/sqft annum)

1. London (West End), England 299.54
2. Moscow, Russia 232.37
3. Tokyo (Inner Central), Japan 220.25
4. Mumbai, India 210.97
5. Tokyo (Outer Central), Japan 175.35

Surprisingly London’s West End cost has decreased by $30 per square foot since last year’s report was released. This could be a result of the 25% loss of property values in the city over the last year, due to the economic real estate gloom.

Overall Europe, Africa and the Middle East sit at the top of the list and are home to the world’s two most expensive office markets. With London leading with a cost of $299.54 per square meter.

Following in second place is Moscow with a cost of $232.37, which is $67.17 less expensive than London. While Moscow shows an increase of nearly 30% this was generated by about two thirds of supply and demand factors versus strong currency fluctuations over the past year.

Tokyo’s Inner Central Five Wards is the third most expensive market worldwide and amounted to a cost of $220.25 per square meter. It is also the most expensive region within the Asia Pacific region.

Mumbai has risen by some $30 over the last year to $210.97 and this isn’t surprising since India experiences a positive growth right now.

Tokyo’s Outer Central has actually seen some decline in some of its sub markets since the middle of last year. All the while, landlords stay optimistic about their prime office districts in regards to future growth. A cost of US$175.35 per square meter is significantly less than Tokyo’s Inner Central region.

The Five Fastest Growing Office Markets,

(ranked by 12 month % increase in occupation cost in local currency and measure)

1. Hi Chi Minh City, Vietnam 94.4%
2. Moscow, Russia 92.7%
3. Singapore 86%
4. Nicosia, Cyprus 58%
5. Oslo, Norway 57.6%

Ho Chi Minh City’s growing urbanisation and economy has led to a surprising 94.4% growth rate over the last 12 months, pushing the city to the top of the list. While massive demand made sure that vacancy levels stayed low in the CBD, prices had to be adjusted to allow for the lack of expansion due to lack of space.

Moscow experienced a robust economy in the first quarter of this year which leaves no doubt that this year will be another boom year, building onto the record year of 2007. With rapid rental growth of up to 50% over the past year, new development activity is surging ahead with a projected stable rental market. The cost has increased by 92.7 percent overall.

Singapore is currently dominated by relocations and rent renewals. Prime rent cost within the city saw figures of SG$16.00 per square foot per month which is a 6.7% increase from the last quarter. In total, Singapore rose by 86%.

Financial institutions and banks have also shown strong interest for expansion and the lack of available CDB space has driven some businesses to relocate.

Nicosia increased their square footage cost of office space by 58% in the last 12 months. While the global property melt down has affected many countries within Europe, some markets haven’t been affected as badly and have actually experienced a positive rental market growth as a result.

Nordic countries are also largely unaffected by this as this has seen Oslo coming into fifth position of the five fastest growing markets in the world. It registered with a 57.6% increase in occupation cost.

CB Richard Ellis Global markets Report (pdf)

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