Mumbai among Top 5 most expensive office markets

Nariman Point in Mumbai is the world's fourth most expensive location for office occupation, leaving behind the likes of Paris, New York, Singapore and Dubai, according to the 'Office Space Across the World 2008' report by real estate services firm Cushman & Wakefield.

Mumbai’s Central Business District (CBD) moved up one place from No.5 in 2006. Nariman Point witnessed annual rental growth of 60%, the report said. The total occupancy cost in Mumbai CBD is US$166.04 per square foot, per annum.

In terms of increase in office rentals, Mumbai CBD is at No.8 in the world.

Within the Asia Pacific region, India captured three of the Top 10 most expensive locations with Mumbai -Nariman Point and Central Mumbai - Worli on 3rd and 4th position, respectively and New Delhi’s Connaught Place at 6th position.

London retains its title as having the most expensive office occupancy costs in the world while Hong Kong is up one place at No.2 followed by Tokyo, which is down one place. Moscow has risen by two places, from No.7 last year to No.5 this year.

The world’s Top 10 most expensive office locations saw rents, a large component of occupancy costs, increase by an average 40% last year, the Cushman & Wakefield report said. Worldwide, the growth in office rents was an average of 14% last year versus 10% in 2006.

London remained the most expensive city, with rents in the city's West End rising 30% and total annual occupancy costs averaging US$311.58 a square foot. Hong Kong moved up to second place from third last year, with annual occupancy costs of US$238.58 a square foot.

Tokyo dropped to third place from second, with US$210.12 a square foot of annual costs. Singapore moved into the global top 10 for the first time, with occupancy costs hitting an average of about US$130 a square foot. New York dropped one level from last year to 10th place.

Office Space Across the World 2008 compares office occupancy costs in 203 key locations in a record 58 countries around the world. Of these 203 locations, 79% showed rental growth last year, 20% stable rents and only 1% showed a rental fall (compared with 6% last year).

In the top ten of the global ranking, the biggest risers include Singapore, which goes up 10 places to join the Top 10 at 7th position. Prime office rents rose 78% in Singapore last year in local currency, the report said.

Together with strong performances in India and Vietnam, among other locations in the region, Singapore helped Asia Pacific achieve the strongest regional growth, with rents rising 23% over the course of 2007, according to Cushman & Wakefield.

The strongest riser in the global ranking is Oslo, which goes up 14 places to 11th position. Turkey accounts for the top three locations for the highest annual growth in office rents in all 203 locations monitored, with Istanbul’s Levent district, Turkey’s most expensive location, in the No. 1 position.