Mumbai world’s 6th most expensive city
Mumbai CBD ranked as the 6th most expensive office location in the world, according to the annual report Office Space Across the World 2011 by Cushman & Wakefield. The commercial hub of India has slipped on place down from its position. A sharp rise in rental values in Brazil’s commercial capital Rio de Janeiro, helped it move from 13th position in 2010 to 4th in 2011, over taking many top ten veterans including New York (5th), Mumbai (6th), Moscow (7th) and Paris (8th). Hong Kong over took London (2nd) and Tokyo (3rd) as the most expensive office location in the world.
Apart from being over taken by Rio de Jeneiro, Mumbai CBD lost one position on the global ranking also because of the fact that it has not seen any change in the rental values over the previous year. Contrary to growth story in rest of Asia including other micro markets of the city, Mumbai CBD maintained a stable occupancy cost of Rs300 sq. ft per month over 2010, with no new supply in the micro-market and limited demand for office space, the report said.
Key office markets around the world have seen sharp increases in rents, according to the Across the World report. After recording the largest rental declines in 2009, Asia saw a sharp bounce-back in values in 2010 with rents in Hong Kong rising by 51%. Bangalore CBD and Pune CBD ranked 8th and 10th respectively as the top ten locations in percentage increase in rental values in Asia.
Arvind Nandan, Executive Director, Cushman & Wakefield, India said, “Asian markets have been recovering and growing at a much faster rate than their European or North American counterparts, an aspect that is reflected in the Indian markets as well. Most major micro markets saw growth in leasing activities in the office market spaces. However, what is particularly significant is the growth in values in Pune. The city saw renewed interest from a variety of sectors due to a multitude of reasons including, proximity to Mumbai, favourable rental values and superior human resource catchments. Bangalore continues to grow at a steady pace with demand remaining high in the city. ”
Bangalore’s CBD witnessed India’s highest growth rate in rental values with an annual increase of 13% largely due to the low vacancy and positive demand. CBD locations of any city have been in demand, however, Bangalore which has traditionally been a high demand market, saw some positive activities in CBD in 2010, impacting the rental values to move northwards.
Barrie David of the Cushman & Wakefield Research Group said, “We are now seeing the sustained presence of Asian locations in the upper reaches of our ranking. Tokyo and Hong Kong are now firmly established as some of the most expensive office locations globally, and three of our top six locations in our ranking are from the Asia region. This is in contrast to 10-15 years ago, where the most expensive cities were generally found in Western Europe and North America, and highlights the recent growth and development within an increasing number of Asian markets over the last few years.”