Photo: Wikimedia Commons
China — or more specifically, Foxconn’s operations in China — has been getting a lot of bad publicity lately.The company’s recent PR train wreck has also spread to Apple, Microsoft, Hewlett-Packard and the myriad other tech companies that have outsourced manufacturing to it.
Well, today provided a bit of good news for at least one of the above parties. And no, it wasn’t Apple. It was China.
According to China Daily, in 2011, Beijing passed Midtown New York City in office rental prices. The move came after a 75% rise in the city’s rental prices over the past year, up from 48% in 2010. As it stands now, top end New York office space costs $120 a square foot, compared to $130 in Beijing.
The report, put out by the property services firm Cushman and Wakefield, goes on to say that 2011 was a good year for office rents globally, especially in the Asia-Pacific region. Asia is now home to three of the top five most expensive cities in the world, two of which are in China: Hong Kong at #1, Tokyo at #3 and Beijing at #5. The two fastest growing locations after Beijing are also in Asia: Shanghai and Singapore.
Meanwhile, New York, the most expensive city in the Americas after passing Rio de Janeiro this year, sits in lowly 6th place.
Overall, rental prices rose 3% in 2011, compared to 1% last year, thanks to improved demand and limited supply. That said, so far the recovery has been limited to prime real estate space in major gateway cities. Cushman and Wakefield warn of a slowed down recovery in 2012.
But of course, the real story here is the growth in Asia. Hong Kong and Tokyo have been major players in the expensive office real estate game for years (both were in the top 3 last year, though their positions were reversed) but China’s performance this year was amazing. Singapore also did very well.
It’s difficult to predict how long the upward trend in Chinese real estate prices will continue. Then again, if it goes up by 75% a year for the next while, maybe we’ll see top flight Chinese firms outsourcing their operations to Midtown
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