The new Savills World Cities Live-Work Index reveals that it now costs an average of just under $72,000-a-year per employee to rent residential and office space in Dubai, a thumping 41 per cent increase on a year ago, making the city the world’s seventh most expensive.
However, the survey noted that this surge in rents came from ‘a relatively low base’ and that ‘the high costs in part reflect a particularly generous office space allocation per worker, a product of the city’s previously high-supply, low rent era.’
Hong Kong is the world’s most expensive city for companies to locate employees, significantly ahead of London and New York, which have been vying for second place over the past two years. Paris completes a list of the top four cities where simply renting living and working space for a single employee costs more than $100,000 a year.
The biggest financial sector premium is seen in Moscow, where Russian money is investing once again, pushing up demand for space in the city. Similar forces are also at play in Dubai, which has seen the impact of Middle Eastern cash in a market benefiting from a return to its traditionally high economic growth rates.
The publication of this index marks two new entrants to the Savills ‘world class city’ ranks: Dubai and Rio de Janeiro. This has as much to do with profile and prominence on the world stage as it has to do with economics or size.
Savills said: ‘Rio earns its place in our index as a result of its changing status as upcoming Olympic host, albeit it enters at a low value base, while Dubai is clearly flexing its muscle as the real business and investment hub of the Middle East. Price rises in the city are a clear reflection of asset price inflation over the recent past.’