BEIJING, Jan. 27 -- Rents in prime Hong Kong offices rose by 45 per cent last year, the sharpest increase among 10 global cities surveyed by a leading real estate services firm, with continued strength expected in 2006.

    London, however, remained the most expensive city for Class A office space, with average rents of US$141.72 per square foot more than twice the US$58.81 per square foot charged in Hong Kong last year, CB Richard Ellis said yesterday.

    Rents in New York rose by nearly 12 per cent to an average of US$44.85 per square foot during the year, while Tokyo rents jumped by almost 20 per cent through the first three quarters of the year to an average of US$111.45 per square foot, making it the second most expensive market surveyed.

    Rents in all 10 markets rose simultaneously for the first time this decade, the company said. Vacancy rates in every one of the 10 markets also came down in 2005.

    "Global investment activity has been strong during the past few years, but rising asking rents and falling vacancies indicate that the fundamentals are catching up," said Andrew Ness, executive director of CBRE Research for Asia.

    "Strong demand for office space, modest level of new completions and continued capital inflow should fuel to provide a strong underpinning to the Hong Kong property investment market," he added.

    Tokyo saw the lowest vacancy rate, at 1.7 per cent in the first three quarters, with London's at 7 per cent for the year and Hong Kong's at 4.8 per cent.

(Source: China Daily)