Mumbai fourth in list of world's most expensive office markets

NEW DELHI: In a clear sign of revival in commercial real estate prices, Mumbai has moved up three positions to fourth in the league of the world's most expensive office markets, just behind London, Hong Kong and Tokyo, according to a new survey.

However, Delhi fell by a single rank to 11th position, as on March 31, in a survey conducted by global realty consultant CB Richard Ellis (CBRE).

"Mumbai, with an occupancy cost of USD 125.76 per sq ft, moved up into the top five global markets, largely as a result of the recent appreciation of the rupee to the US dollar," the report said.

On the other hand, the consultant attributed Delhi's fall to the rise of other cities, especially in Brazil, due to higher rental appreciation.

"Overall, office space supply in NCR is large, which will keep the rentals stable in the medium term and we may also see a marginal drop in rentals in certain micro-markets within the NCR," CBRE Chairman and Managing Director (South Asia) Anshuman Magazine said.

In an earlier survey, CBRE placed Mumbai and Delhi at 7th and 10th positions, respectively, in the list of the world's most expensive office locations, as on September 30, 2009.

London topped the list with a rental of USD 182.94 per annum. Hong Kong and Tokyo found their berth at 2nd and 3rd positions with rental tags of USD 153.20 and USD 143.99 respectively, CBRE said.

The Asia-Pacific had 13 markets in the list of top 50 most expensive locations, with three of the top five most expensive markets.

The most expensive market in the global ranking from the Pacific region was Perth, carrying a rental tag of USD 59.29, which came at 35th position.

Some of the other prominent cities that found places in the list include Moscow (5th, USD 125.10), Paris (7th, USD 113.23), Dubai (9th, USD 108.92), Sao Paulo (10th, USD 100), Rio de Janeiro (12th, USD 95.63), Milan (18th, USD 77.93) and Seoul (20th, USD 71.82).
The report also found that on a year-over-year basis, global occupancy costs are searching for a bottom, with the 133 markets monitored revealing a collective rental drop of 4.6 per cent over the 12-month period ending March 31, 2010.