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

TD Bank Centre towers in Toronto are shown. The price of office space in Canada's largest city dropped 24 per cent in 2009. (CBC)

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

The most expensive office real estate in Europe is found in London, 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 annual decline 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 $29.90 per square foot. That was a drop of 26 per cent compared with last year.

Calgary was in second place, at $28.22 per year, a decline of 24 per cent. Next came Ottawa, where the average price increased two per 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 its rank 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.