Tokyo office space world's priciest

Tokyo passed Hong Kong to become home to the world's most expensive office space,according to a new report on global real estate.

In an annual ranking in U.S. dollars by real estate firm Cushman & Wakefield Inc., the average price of office space in the Japanese capitalcost $163.90 a square foot in 2009. That's a drop of 21 per cent comparedwith 2008, but the pace of decline was less than the previous holder of thetop spot, Hong Kong, which dropped 35 per cent to $142.52.

The most expensive office real estate in Europe is found inLondon, where West End prices hit $119.40 per square foot, down 25 per cent.

On the whole, prices were down almost everywhere, with the average price declining by 10 per cent the first annualdecline since 2003.Of 63 major cities covered in the survey, prices declined in 54, held steady in three and rose in only six instances.

Vancouver tops Canadian results

Canadian cities largely mirrored the global trend.Vancouver remained the priciest market in Canada at $29.90per square foot. That was a drop of 26 per cent comparedwith last year.

Calgarywas in second place, at $28.22 per year, a decline of 24 per cent. Next came Ottawa, where the average priceincreasedtwoper cent to $23.46 per square foot. Toronto prices were 24 per cent lower, at $19 per square foot. The last Canadian city ranked was Montreal, where prices increased three per cent to $18.70.

"The Canadian market was particularly weak and locations such as Toronto and Calgary saw a consistent fall in rents over the whole year," the report found. "In addition, both cities may see a slower recovery than other Canadian locations as a result of significant development activity that is scheduled to deliver space to these markets in 2010."

Globally,Vancouver was ranked 37th overall, three spaces down from itsrank of 34 last year.

Midtown Manhattan rents in New York City remained the continent's most expensive at $104.69 a square foot, down four per cent. Continent wide, rents declined by an average of eight per cent.

Globally, rents are expected to dip in the middle of 2010 before rebounding, the report forecast.