Mumbai has emerged as the sixth most expensive office location in the world according to Office Space Across the World 2009, a report by global property consultants Cushman & Wakefield. Nariman Point, the Central Business District (CBD) of India’s financial capital however slipped two positions from last year’s fourth rank moving towards more cost effective rentals, giving way to Moscow (fourth) and Dubai (fifth).
Honk Kong emerged as the most expensive office location in the world while Worli in Mumbai and CBD in New Delhi took the 10th and 12th position respectively as the most expensive office location in the world , the report said.
With the slowdown in the global economy, many corporates eased or postponed their expansion plans in Mumbai resulting in subdued demand for office space, the report added. As a result Mumbai witnessed an overall vacancy of about 12 per cent in 2008 which is significantly higher than the previous 4-5 per cent of vacancy recorded in 2007.
Worli, which came into the 10th position, witnessed a correction of approximately 13 per cent in rental values in 2008 over the previous year of 2007.
CBD in the New Delhi region witnessed vacancy of 3-4 per cent and emerged as the 12th most expensive office location, slipping two positions from last year.
Bengaluru witnessed the highest rental growth in India and the second highest in Asia Pacific with the CBD region recording 18 per cent appreciation over last year owing to limited Grade-A supply coupled with relatively low vacancy and no scheduled supply.
Select locations in Hyderabad (CBD and Prime Suburban) witnessed 6-7 per cent growth while CBD in Kolkata witnessed 17 per cent rental growth. Select central locations in Mumbai as well as NCR witnessed 13 per cent and 12 per cent annual correction respectively. The correction came in response to the weakening business sentiment and non-sustainability of high price points achieved during previous years.
The study compares office occupancy costs in 202 key locations in 57 countries around the world. London lost its status as the world’s most expensive office location for the first time in nine years as rental values corrected by 23 per cent in West End.
— IndiaRetailing Bureau