While Mumbai moved up to fourth place again
(it last held this position in early 2008), London's
West End remains the world's most
expensive office market, according to CB Richard
Ellis Group, Inc. Global Research and Consulting's
semi-annual Global Office Rents survey. Hong
Kong's central business district has risen to second
place pushing Tokyo's inner central to third place.
Moscow remains in fifth while Delhi dropped to 11th
place in the CBRE rankings, which tracks occupancy
costs for prime office space in 176 cities worldwide.
"Mumbai CBD regaining its fourth place in the
most expensive office rents list (from seventh place in
December 2009) is a clear indication that the corporates
have re-started to expand their operations and
supply in this micro-market continues to remain limited,
which has moved up the rentals," Anshuman
Magazine, Chairman & Managing Director, CB
Richard Ellis South Asia, said. "Besides, the rupee
appreciating against the dollar has also played an
important part in pushing Mumbai up the global
ranks of the world's most expensive office markets.
However, overall the supply of office space is significant
and that will ensure rentals would continue to
remain flat in the medium term."
Office occupancy costs measured in US dollars are
affected by changes in the dollar's value versus the
respective local currency. Hence, office occupancy
costs when converted into US dollars are driven by
both the local market dynamics of supply and
demand as well as currency changes.
"We have found that currency fluctuations play a
big role with regard to where markets rank in the top
10 for office costs," said Dr. Raymond Torto, CBRE's
Global Chief Economist. "However, the 'most expensive
club' still includes the usual names-London,
Hong Kong and Tokyo."
Asia Pacific had 13 markets rank in the top 50 most
expensive, with three of the top five most expensive
markets. Hong Kong (Central CBD), with an occupancy
cost of $153.20 per sqft, was first in the region
followed by Tokyo's Inner Central, with an occupancy
cost of $143.99 per sqft. Mumbai, with an occupancy
cost of $125.76 per sqft, moved up into the top
five global markets largely as a result of the recent
appreciation of the rupee to the US dollar.
The most expensive market in the global ranking
from the Pacific region was Perth ($59.29), which
came in at 35th, despite also experiencing the third
largest decline in local currency, at 27 per cent.