Mumbai slips in office cost ratings

The stagnancy in rentals and a marginal increase in commercial space capital values have made Mumbai cheaper globally.

Mumbai has slipped 8 points since mid-2004 to reach the 23rd position among the Top 50 cities in the office occupation costs computed by real estate consultant C B Richard Ellis (CBRE).

The other Indian city in the survey is New Delhi""down one rank at the 33rd position.

The occupation cost (comprising of rents, local taxes and service charges) in Mumbai is $52.74 per square feet per annum, while in Delhi it is $40.72.

London's West End remained the most expensive location since the second quarter of 2000, with an occupation cost of $191.60 per square feet per annum.

According to Anshuman Magazine, South Asia managing-director of CBRE, "In Mumbai, the demand for office space is in equation with the supply. This is the prime reason for Mumbai becoming more affordable. Getting a lower ranking would further help encourage investments into the booming real estate industry."

The rentals in the city have remained stagnant in the past one year while capital values have moved just 20-25 per cent in 2004.

The occupation cost in Mumbai is more than New York-midtown Manhattan, currently at the 34th slot. The two Indian cities, Mumbai and Delhi are costlier than their Chinese counterparts as well, which have also moved down the list following dip in occupation costs.

There is only one new entrant in the CBRE list""Canadian capital Ottawa""replacing Ho Chi Minh city of Vietnam.

Ottawa was the other big mover besides Mumbai. It rose from the 51st position to the 41st, over the second half of 2004. Hong Kong at 17 and Toronto at 31st positions also rose seven places due to rental value gains as well as foreign exchange rate shift.

Apart from London's West End, London (city), Tokyo (inner central), Tokyo (outer central), Paris and Birmingham are the other costly cities in terms of office space.

The top 50 list comprised 30 cities from Europe, 10 from Asia, seven from North America, two from Carribeans and one from Australia.

In CBRE's Top 50

---

• Mumbai has slipped 8 points to the 23rd position in the CBRE's Top 50
• Delhi is one rank down in the 33rd position
• The annual occupation cost in Mumbai is $52.74 per sq ft while in Delhi it is $40.72
• London's West End, the most expensive location, has an occupation cost of $191.60 per sq ft
• Rentals in Mumbai have remained stagnant over the past one year