The Hindu Business Line : Mumbai, fifth most expensive office market: Survey

Mumbai, Dec. 3 While Mumbai’s Nariman Point dropped to fifth place, London’s West End and Moscow remain the world’s two most expensive office markets.

Hong Kong’s CBD (central business district) and Tokyo’s Inner Central District round off the top five, according to CB Richard Ellis Group Inc market view/office occupancy cost survey.

Mumbai occupancy cost was $170.85 per sq ft per annum (about Rs 700 a sq ft a month) and New Delhi $122.18 (about Rs 500 per sq ft a month). Hong Kong jumped into the top three most expensive cities globally, with occupancy cost rising to $231.59.

Ho Chi Minh City dropped from the top spot to number two among the top 50 fastest growing cities, while Perth, Australia, jumped up 10 spots in the most expensive rankings, coming in at number 31. London’s West End remained the world’s most expensive office market at $248.66, and Moscow retained its number two spot at $234.73.

New Delhi’s CBD dropped to 13 on the list. The report tracks world markets with the highest as well as fastest-growing occupancy cost for the 12 months ended September 30. Occupancy cost represents rent, local taxes and service charges per square foot annually.

The average rate of growth for office occupancy cost among the 172 markets monitored in the survey was eight per cent.

Up 94.6 per cent, Abu Dhabi has by far the fastest growing occupancy cost, with three of the top five fastest growing countries situated in West Asia.

Mr Anshuman Magazine, Chairman and Managing Director, CB Richard Ellis South Asia, said, “India’s office market slowdown is reflective of the global economic slowdown as a majority of the occupiers of quality office space are multinational companies. Office supply too has seen a substantial increase in the past few years. In spite of this, Mumbai and New Delhi continue to be in the top 15 world’s most expensive office markets.”

“Our current perceptions are greatly affected by the current economic malaise and we tend to forget how fast rents and occupancy costs were rising over the last 12 months,” said Dr Raymond Torto, CBRE’s Global Chief Economist.

The rate of change is generally slowing, and in some markets the pricing direction is down. However, unlike previous downturns, which have occurred simultaneously with extensive overbuilding, the real estate market globally today is in a stronger position to weather the difficulties than in the past, he said.

Asia Pacific was the fastest growing region among markets in the top 50, at an average rate of 26.2 per cent.

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