Prime office costs in Dubai are the highest in the Middle East but are still only a third of those of the world's most expensive commercial property markets, CBRE said in a new report on Monday.
Its Global Prime Office Occupancy Costs survey showed that Dubai ranked 23rd globally with occupational costs of $92.56 per square feet per annum as of the first quarter of 2014.
London's West End recorded overall occupancy costs of $277 per sq ft per year and topped the "most expensive" list.
Hong Kong (Central) followed with total occupancy costs of $242 per sq ft with Beijing (Finance Street) ($194 per sq ft), Beijing (Central Business District CBD) ($187 per sq ft) and Moscow ($165 per sq ft) rounding out the top five.
Nick Maclean, managing director, CBRE Middle East, said: "Dubai continues to be the destination of choice for global investors looking to enter the region.
"Overall market fundamentals are arguably stronger now than during 2008, with solid occupier demand, a smaller development pipeline, improved regulations and a healthier global economy."
He added: "Over the period of the next 12 months, demand for prime office space will continue to increase as companies upgrade their existing setup or expand their offerings in light of the recent positive activity.
"The lack of high quality offices in the CBD area and the increased demand from corporates has resulted in rentals to slowly rise in prime locations. The rentals are likely to increase further as landlords seek to achieve premiums on remaining space as occupancy levels near capacity. CBRE expects demand to remain high of office spaces, throughout the remaining of 2014, in key locations such as Downtown, DIFC and Tecom."
According to the CBRE research, London's West End remained the world's highest-priced office market, but Asia continued to dominate the world's most expensive office locations, accounting for three of the top five markets.
The study also found that rents are rising fastest in the Americas, where real estate fundamentals continue to improve significantly. Overall, the US accounted for five of the 10 markets with the fastest growing occupancy costs. These markets were Seattle (Suburban), San Francisco (Downtown), San Francisco (Peninsula), Houston (Suburban) and Houston (Downtown).
Global prime office occupancy costs rose 2.3 percent year-over-year, led by the Americas (up 3.3 percent) and Asia Pacific (up 2.9 percent). Meanwhile, EMEA was essentially flat, edging down 0.1 percent year-over-year.
CBRE tracked occupancy costs for prime office space in 126 markets around the globe. Of the top 50 "most expensive" markets, 21 were in EMEA, 20 were in Asia Pacific and 9 were in the Americas.