Wednesday, February 23, 2011

Mumbai is world's 6th most expensive city for office space

Mumbai slipped by one place to sixth in the list of the world's most expensive office locations in 2011, according to global realty consultant Cushman & Wakefield.

The 2011 list was topped by Hong Kong, while London and Tokyo came second and third in the rankings, which valued Mumbai's office occupancy cost at USD 114 per square foot a year. India's financial capital occupied the fifth position in 2010, Cushman & Wakefield (C&W) said.

"Apart from being overtaken by Rio de Janeiro, Mumbai CBD (Central Business District) lost one position on the global ranking also because of the fact that it has not seen any change in the rental values over the previous year," the consultant said.

As per C&W's estimates, the Brazilian city moved up to fifth position from 13th in 2010 as rental values rose very sharply. The average rental for opening an office in Rio de Janeiro has been estimated at USD 120 per square foot a year.

New York, which was a place below Mumbai in the 2010 list, moved up by a single notch to fifth place this year with an annual occupancy cost of USD 115 per square foot, C&W said.

Hong Kong topped the list of the world's 10-most expensive office locations this year with an average rental of USD 241 per sq foot every year. It jumped up two places in the list from third position last year.

London hung on to its distinction of being the second most expensive place to rent an office in the world, with an average rental of USD 233 per square foot per year.

Japan's capital, Tokyo, slipped to the third spot this year from first rank last year, with an average rental of USD 166 per square foot per year.

The other cities that found places in the list are Moscow, Paris, Zurich and Milan, the survey said.

"Asian markets have been recovering and growing at a much faster rate than their European or North American counterparts, an aspect that is reflected in the Indian markets as well," C&W India Executive Director Arvind Nandan said.

Most major micro markets saw growth in leasing activities in office market spaces, he added.

The survey said that after recording the largest rental decline in 2009, Asia witnessed a sharp rebound in 2010, with rents in Hong Kong rising by 51 per cent.

In India, Bangalore witnessed the highest rental growth of 12.68 per cent in 2010, followed by Pune (9.09 per cent), vis-a-vis the previous year.

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