The cost of office space is typically one of the top three expenses for an offshore services operation.  As in the United States or Western Europe, real estate expenses are highly variable even within a specific country or city.  In many cases, premium office space can be more expensive in offshore locations that the cites where the work originates.

Figure 1 below illustrates gross rent per square foot for Class A office space. Sources include office ocupancy cost surveys from CD Richard Ellis and Colliers International.  Costs are in US dollars per square foot per year and are an average across key cities.  As noted above, care must be taken in interpreting the data since costs can vary drastically across cities and neighborhoods. For example Class A office space in a prime location in the central business district in Mumbai, India can be $130 per square foot per year, while comparable space in Bangalore can be almost one quarter the cost at $35 per square foot.

Office Occupancy Cost for Leading Offshore Locations - Figure 1

Sources: CB Richard Ellis, Colliers International, Offshore Advisor

Russia has some of the highest cost Class A properties of all offshore locations.  Gross occupancy costs in Moscow are $170 per square foot per year.  The central business district in Mumbai, India comes in second with prime locations costing $130 per square foot per year. For comparison purposes, Class A properties in downtown Manhattan are $53 per square foot per year.

The least expensive locations include South Africa, Indonesia, Thailand, Chile and the Philippines.  Class A occupancy costs are half or less than major cities in the United States.