Improve infra to boost office space supply: CBRE
According to the CB Richard Ellis Group’s (CBRE) semi-annual Global Office Occupancy Costs survey, Mumbai has dropped to 6th place as the world’s most expensive office market. Delhi was at 12th place in this survey which saw Tokyo’s Inner Central District emerge as the most expensive office market place followed by London’s West End and Moscow in the 2nd and 3rd positions respectively, as per the survey which tracks office occupancy costs in more than 170 cities across the world.
"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 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,” said Anshuman Magazine, chairman & managing director, CB Richard Ellis South Asia.
“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 Dr 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,” he added.
The survey discovered that financial centers have been most significantly affected by declining occupier demand and, as one would expect, registered the most material decreases in office rents. 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 (on an un-weighted average basis) compared with an increase of 8.0% 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 survey adds.