Costly offices: Mumbai slips to 6th, Delhi 12th

Costly offices: Mumbai slips to 6th, Delhi 12th
Times of India, June 5, 2009, Page 28

TIMES NEWS NETWORK, Mumbai

Mumbai has dropped one spot to the sixth place in the ranking of the world’s most expensive office markets, according to C B Richard Ellis’s biannual Global Office Occupancy Costs survey.

Tokyo’s Inner Central District has supplanted London’s West End as the world’s most expensive office market. West End is now the second-most expensive office market followed by Moscow, Hong Kong’s Central Business District or CBD and Tokyo’s Outer Central District in the CBRE report, which tracks office occupancy costs in more than 170 cities around the globe.

Said Anshuman Magazine, chairman and MD South Asia, ‘‘This ranking highlights the decrease in rentals we have witnessed in the last six months due to a reduction in demand. However, Mumbai continuing to be in the top 10 and Delhi being at 12th place from 7th reflects the shortage of prime office supply in India. 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.’’

According to the report, in many cases, major global office markets have seen occupancy costs fall by 20% or more over the last 12 months. Across the 170 cities as a whole, office occupancy costs fell 2.8% over the 12 month period ending March 31, 2009 compared with an increase of 8% in the 12 month period ending September 30, 2008. Singapore had the largest year over year decrease in occupancy costs with a drop of 34%.

‘‘The great global recession has clearly taken its toll on the world’s office markets, particularly those with significant concentrations of financial industry employers,’’ said Raymond Torto, CBRE’s global chief economist.

The most expensive office markets, as measured in dollars, are considerably less expensive than a year ago and occupiers are now in a strong position to procure prime space at attractive costs. For instance, a year ago office space in London’s West end was nearly $300 per sq ft, while today that space goes for $172 per sq. ft.