According to the Economist, London is (once again) the most expensive city in the world for renting office space.
Business cycle fluctuations aside, no surprises here. As my colleagues Cheshire and Hilber (2008) carefully document, planning
restrictions in England impose a 'tax' on office developments that varies from
around 250% (of development costs) in Birmingham, to 400-800% in London. In
contrast, New York imposes a 'tax' of around 0-50%, Amsterdam around 200% and
central Paris around 300%.