'Mumbai 6th most expensive office market in world'

With decline in rentals, Mumbai has become lesser expensive for office space, but remains at the sixth position among the world's costliest office markets, a report has said.     

According to a report on global trends of office spaces by real estate consultant CB Richard Ellis, Mumbai fell to 6th position from 5th in the list of the world's most expensive office markets, which is topped by Tokyo.     

"This ranking highlights the decrease in rentals we have witnessed in the last six months due to a reduction in demand. To reduce office occupancy costs further and facilitate more supply of office space, we need to urgently improve our infrastructure and amenities. This would bring our world rankings down further and make India more competitive," CBRE Chairman and Managing Director (South Asia) Anshuman Magazine said.     

However, the National Capital's ranking rose to 12th place mainly due to shortage of prime office complexes in Delhi. It had occupied 13th position in the consultant's last findings in November, 2008.     

Magazine said Mumbai's ranking among the top 10 expensive markets and Delhi being at the 12th place reflect the shortage of office space in India.     

The average annual rentals of Mumbai and Delhi stood at $131.04 per sq ft and $86.94 per sq ft, respectively as on March 31, 2009.

The list, which has been compiled taking into consideration 50 important cities across the world, has been topped by Japanese capital Tokyo's Inner Central locality with a rental of $183.62 a year in each sq ft.     

The other places that found berths in the top of the list include London (West End), Moscow, Hong Kong (Central Business District) and Tokyo (Outer Circle).     

Dubai, Paris, London (City), Dublin and Abu Dhabi also got their slots in 7th, 8th, 9th, 10th and 11th places, respectively, CBRE said.     

Some of the prominent cities, which were expected to be in the top of the list, but did not, are Singapore (15th), New York (21st), Madrid (24th), Shanghai (25th), Munich (37th), Los Angeles (45th), Washington DC (47th) and Beijing (50th).     

"In many cases, major global office markets have seen occupancy costs fall by 20 per cent or more over the last 12 months. Across the 170 cities as a whole, office occupancy costs fell 2.8 per cent over the 12 month period ending March 31, 2009, compared with an increase of 8 per cent in the 12 month period ending September 30, 2008," the report said.     

Singapore had the largest year-over-year decrease in occupancy costs with a drop of 34 per cent, the consultant pointed out.