London has become the world’s most expensive city for companies to locate employees, overtaking Hong Kong, which had previously topped the ranking for an unbroken five year period, according to latest analysis from international real estate adviser, Savills.
New York and Paris complete the pack of four leading cities, where the combined costs of renting residential and office space top $100,000 per employee per year, Ireland’s Finfacts reported Wednesday.
Living and working costs in London have jumped almost 40% since 2008 in dollar terms while of the top 12 cities, only Rio de Janeiro, at 86%, and Sydney, up 58%, have climbed more over the period.
The four top cities have dominated the Savills Live/Work Index top 12 world cities since its launch in 2008, reflecting the relative stability of both the residential and commercial markets of more mature global cities post downturn compared to the more recently emerged new world cities, Savills says in a new report, 12 Cities, published Tuesday.
The index measures the total costs per employee of renting living and working space on a US dollar basis in 12 world cities. Fluctuations in total live/work costs reflect not only the strength of a city’s residential and office markets and occupier taxes and costs, measured at a local level, but also the impact of fluctuating exchange rates on the cost of doing business on a world stage. It is this that has contributed in large part to London’s recent ascendency in the rankings.
London property costs grew in US dollar terms by an annualized rate of 10.6% in the first six months of the year so London has now become the most expensive world city in which to accommodate staff, at $121,000 per year. This was largely due to the UK pound’s recent appreciation against the US dollar.
Overall, the US dollar cost of residential and commercial accommodation in London has increased by 39% since 2008. Despite its climb in the rankings – from 5th to 1st place since 2008 – London is still a way off the live/work accommodation costs record, set by Hong Kong in 2011 at $128,000 a year.
