Mumbai, Delhi among world's costliest cities

Citing growing realty industry and lack of quality of office space in the country, the latest survey by global realty consultancy firm DTZ Debenham Tie Leung has ranked Mumbai and Delhi as the fourth and eighth expensive central business district (CBD) areas in terms of office occupancy costs, above Singapore and Shanghai, in Asia Pacific.

According to the survey, CBD occupancy costs in Mumbai and Delhi are $11,400 (approx Rs 5,13,000) and $8,150 (Rs 3,66,750) per annum per workstation.

While London (West End), Hong Kong and Paris occupy the top three slots globally, Mumbai and Delhi have risen through the global ranks and currently occupy 18th and 51st positions, respectively.

Southern metros Bangalore and Chennai occupied 117th and 123rd positions, respectively.

In 2006, Mumbai and Delhi occupied 27th and 56th positions in 2006 respectively. But, in terms of CBD rental increase, surprisingly, Chennai posted highest increase of 37 per cent among Indian cities surveyed and fourth highest globally.

Mumbai and New Delhi posted 34 per cent and 23 per cent respectively. DTZ's Tenth Annual Global Office occupancy Costs survey 2007 enlists accommodation costs in prime-CBD office locations covering 134 business districts in 48 countries.

Globally, Singapore posted highest CBD increase of 65 per cent y-o-y, the highest increase among the 134 locations surveyed, to $7,860 per workstation per annum (pa).  Bangkok ranks next with 43 per cent increase and Brisbane comes next with 41 per cent.

On the escalating CBD occupancy costs and rental increase in Indian metros, Ankur Srivastava, MD, DTZ Debenham Tie Leung India said, "All CBDs in major Indian cities have seen limited new supply of Grade A office space in the past year. Given the overall economic activity in India, demand for CBD space far exceeded supply and led to an overall increase in prime occupancy costs."

Global economic growth provided the basis for sustained demand for office space in key business districts, the survey said. The professional, financial, IT and telecom sectors continued to dominate take-up in most countries. 

In 2006, markets such as Hong Kong, London, New York and Tokyo continued to lead the global office market with high occupancy costs. Out of 102 of the markets surveyed (76 per cent of the sample size) posted an average increase in occupancy cost of 14 per cent per workstation, it said.