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The world's top 10 most expensive office locations saw rents increase by an average 40% last year, according to Office Space Across the World 2008, a report issued by real estate services firm Cushman & Wakefield.

London retains its title as the most expensive office location in the world, with one m² of prime space in London's West End renting for EUR 2,277 a year, with rents up 30% last year in local currency terms. In second place is Hong Kong, at EUR 1,745, where rents increased by 40% last year.

Office Space Across the World 2008 compares office occupancy costs in 203 key locations in a record 58 countries around the world, with new entries in the global ranking including Kiev in Ukraine (16th) and Vietnam's Ho Chi Minh City (17th place).

Of these 203 locations, 79% showed rental growth last year, 20% stable rents and only 1% showed a rental fall (compared with 6% the previous year). Overall globally, rents grew by 14% in 2007, compared with 10% in 2006.

'Last year saw the fastest level of growth in office occupancy costs in many of the world' s top locations since the turn of the property cycle in 2001, with the strongest demand coming from the financial sector. Behind this growth is a shortage of top-quality product as developers remain relatively cautious, especially compared with the previous peak years of 2001 and 2002,' said Elaine Rossall, head of Business Space Research & Consultancy for C&W in EMEA.

'We are unlikely to know the full effects of the current credit squeeze on the world’s main office locations until further into 2008. In the meantime, we foresee the market for the right product in the right location remaining robust, especially in the more buoyant markets of Asia Pacific, although expectations are that last year’s strong rental growth will ease this year', she added.

Moscow has risen two places to join the top five ranking for the first time, with prime occupancy costs now above those of Paris, which in addition has been overtaken by Mumbai. The strongest riser in the global ranking is Oslo, which goes up 14 places to 11th position.