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Asia's growth is blowing away Canada's soaring dollar when it comes to what's driving the hottest office rental markets in the world, according to a study by CB Richard Ellis Ltd.

 

The booming economies of Singapore, Mumbai, Manila and Bangalore have led to dramatic increases in office rents in those cities since May. By contrast, office prices in major Canadian cities have been flat or experienced more modest gains despite the loonie's rise against other world currencies so far this year.

 

"Even though there has been a continuing appreciation in the value of the Canadian dollar versus many currencies, our office costs are still very competitive," said Blake Hutcheson, president of CB Richard Ellis.

 

Edmonton is the only Canadian city in the study's Top 10 list in terms of the largest rental rate increase since May, coming in at No. 9. At $46 a square foot, Edmonton is currently the 57th most expensive office rental market in the world, up from 83rd in May and 150th last year.

 

The commodities boom has put office space there in short supply, and the city isn't yet undergoing the same kind of surge in development that's taking place in Calgary and Toronto, said Ray Wong, director of national research at CB Richard Ellis.

 

Calgary, Canada's most expensive office market, currently ranks 34th on the list of the world's priciest places to rent, at $64 a square foot. Toronto, which makes up nearly 40 per cent of the Canadian office market, is 35th, at $63.35 a square foot. Both rankings are similar to where they were in May. Vancouver, where office space is in short supply, was 52nd on the list, at $49.46 a square foot, up from 57th place in May.

 

Since Jan. 1, the loonie has risen 22.2 per cent against U.S. currency, 15.9 per cent against the British pound and 11.8 per cent against the euro. However, that hasn't caused the big rental price increases in Canada being experienced by several other major business centres, such as London's West End, the most expensive place in the world to rent an office, at $326.67 a square foot. That lofty figure has risen 17.2 per cent since May, when it stood at $278.82 a square foot.

 

Next most expensive office rental market was Mumbai, which rose to second from fifth, at a cost of $166.22 a square foot. Greater London came third, followed by Moscow and Tokyo. Markets with the largest year-over-year increases in rental costs were Singapore (up 82.6 per cent), Moscow (up 65 per cent) and Mumbai (up 55 per cent).

 

With strong services and infrastructure, Canada's moderate rents make it a competitive office market globally, Mr. Wong said. Rental costs are expected to stabilize in Calgary and Toronto as more buildings go up, but tenants currently looking for high quality office space in those cities will have limited choices, he said.

 

(Courtesy of Reportonbusiness.com)

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While the cost of Vancouver office space seems pricey and gets more expensive each year, it's a relative bargain, according to list of major cities around the world.

 

At $49.46 a square foot on average, Vancouver office space was ranked 52nd on a list of 170 cities compiled by CB Richard Ellis Ltd.

 

Calgary had Canada's most-expensive office space, 34th on the list at $64 per square foot when the list was compiled in May. Among other Canadian cities, Toronto, at $63.35 a square foot, ranked 35th, Montreal was 94th ($35.84), Vancouver (suburbs) was 99th ($33.46) and Halifax was 111th ($30.23).

 

London's West End retained its No. 1 ranking with office space of $326.67 a square foot.

 

New York, in the No. 12 spot, was the most expensive North American city, at $100.10 per square foot.

 

(Courtesy of The Province)

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