Hong Kong replaced London as the most expensive place to rent offices last year, local media reported on Thursday.

It is the first time for Hong Kong in almost a decade to lead in office rental costs, the newspaper South China Morning Post quoted a survey by property consultant Cushman and Wakefield as reporting.

Cushman and Wakefield compared office rents in 202 key locations in 57 countries and regions around the world. On average, global rents rose 3 percent last year, down from 14 percent in 2007, representing the lowest growth rate since 2004.

A faster pace of decline in rents in London helped Hong Kong to be ranked top in the survey, the daily said.

Demand for office space in London has plummeted as the financial meltdown combined with a weaker British pound against the Euro hit landlords in one of the world's most important capital centers.

Rents in London's West End fell 23 percent to US$1,782 per square meter last year, according to Cushman and Wakefield. In contrast, average rents in Hong Kong's Central district fell 4 percent to US$2,214 per square meter.

However, rising unemployment and deteriorating hiring expectations will become the key factors dragging down office rents in Hong Kong, according to CLSA head of Asia property research Aaron Fischer.

"Hong Kong office rents are expected to fall 60 percent from the end of 2008 to the end of 2010," Fischer said. "Hong Kong will not be Number one this year."

(Xinhua News Agency February 27, 2009)