Hong Kong office rentals fell slightly in 2008 and became the most expensive in the world as rentals for top class offices in other major cities worldwide fell even more, a latest industry report said.

The average annual rental for each square foot of grade A offices in the central business district of Hong Kong was 177.86 U. S. dollars at the end of 2008, by far the most expensive worldwide, real estate service provider Colliers International said.

Moscow trailed at 139.41 U.S. dollars per square foot, while Tokyo and West End, London followed at 128.4 U.S. dollars and 112. 16 U.S. dollars, respectively.

Dubai finished the fifth at 104.95 U.S. dollars per square foot.

West End, London had been the most expensive place to run an office at the end of 2007, with local offices for rent at 208.82 U. S. dollars per square foot, which means there has been a sharp decline of 38.51 percent in 2008, whereas rentals in Hong Kong fell by only 2.13 percent year on year at the end of 2008.

Hong Kong ranks second at the end of 2007.

The global report covering the top 50 cities worldwide said all regions worldwide were experiencing recession or similar conditions, leading to a substantial fall in the demand, higher vacancies and falling rents for office space.

The outlook for 2009 is for a further weakening in fundamentals.

There will be "little prospect of recovery until early next year," it said.

Simon Lo, director of research and advisory of Colliers Hong Kong, said the local market has been undergoing dramatic changes since the end of 2008.

"During the first two months of 2009, there was a 16 percent decline in Grade A office rents. The vacancy rate increased from 4 percent to 5.1 percent. Lease structure has become more common among key occupiers in the financial sector," he said.

"Given the substantial consolidation of the global economy, the current downward trend will certainly continue throughout the year of 2009," he added.

(Xinhua News Agency March 19, 2009)