Mumbai, Delhi in world's 10 costliest office markets

Mumbai and New Delhi are listed among the world's 10 most expensive office markets.

While Mumbai dropped one more place to 7th position and Delhi  moved up from 12th to 10th position. London (West End) reclaimed its position as the world's most expensive office market according to CB Richard Ellis Group's Global Office Rents survey.

Office markets worldwide are experiencing a fall in prime office occupancy costs. The year-over-year change in prime office occupancy costs of the 179 markets monitored revealed an average drop of 7.7 per cent worldwide over the 12-month period ending September 30, 2009.

The majority of markets - 131 markets in total - experienced a year-over-year decline including nearly 50 which saw rents tumble by double-digit percentage-points.

Check out the top 10 expensive office markets... ...

1. London (West End)

London (West End) is the world most expensive place with an occupancy rate of $184.85 per sq. ft. per annum.

2. Tokyo, (Inner Central)

Tokyo (Inner Central) is Asia's most expensive market with an occupancy cost of $172 per sq ft. The city, which was at number 1 in May this year has slipped to second place.

3. Tokyo (Outer Central)

Tokyo (Outer) is the third most expensive place with a occupancy rate of $139.09 per sq. ft. per annum.

4. Hong Kong (CBD)

Hong Kong comes at the fourth position with a occupany rate of 137.61 per sq. ft. per annum. For the Asia Pacific region, the office markets that experienced the largest decreases include Singapore (-53.4 per cent), Ho Chi Minh City (-45.4 per cent), as well Hong Kong which declined over 30 per cent in the past year.

The Asia-Pacific region had 17 cities with double-digit declines in office occupancy costs.

5. Moscow

Moscow, the fifth most expensive in the world, was second in Europe with occupancy costs at $132 per sq. ft. Kiev led the world with the largest year-over-year decrease in office occupancy costs, falling 64.6 per cent from year-ago levels.

Other markets in Europe that are experiencing the largest decreases include Moscow, Oslo, Warsaw and Dublin. The EMEA region had 17 cities with double-digit declines in office occupancy costs.

6. Paris

Paris stands at the 6th position with an occupancy rate of $122.51. Two cities in Brazil -- Rio de Janeiro and S o Paolo -- have succeeded New York's Midtown as the most expensive office location in the Americas.

7. Mumbai

Mumbai continues to remain in the top ten having dropped from 6th to 7th position with an occupancy rate of $121.11. "From the third quarter of 2009 onwards we have seen corporates coming back into the market and office space take-up has improved. 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," says Anshuman Magazine, chairman & managing director, CB Richard Ellis South Asia.

According to CBRE's Asia Office Market View Report for Q3, 2009, there was renewed activity in the major Indian office markets with CBD rents in key cities starting to pick up, although this did not have any positive impact on rental rates in decentralised office areas.

Nariman Point CBD in Mumbai witnessed few completed transactions, with many companies preferring to move to locations in the extended and alternate business districts in order to reduce their real estate costs.

8. Dubai

Dubai follows Mumbai at the 8th position with an occupancy rate of $108.91.

Forty-one markets experienced positive growth. Aberdeen, Scotland and Rio de Janeiro, Brazil both grew by more than 10 per cent as all markets have not been as affected by the decline in global demand and demand for office space has proven resilient in some areas due to the local market dynamics.

9. London (City)

London city comes next in the top 10 list with a rate of $108.83. "While there are signs that commercial real estate values are stabilising in some markets in Asia and parts of London, underlying property fundamentals are still weak," said Dr. Raymond Torto, CBRE's global chief economist.

"However the office market may be on the cusp of moving from intensive care to the stabilisation stage - the first step to getting back to good health."

10. New Delhi  

New Delhi has joined the top 10 ranking moving up from 12th to 10th position after two years with a occupancy rate of $88.92. Although the rentals in the Delhi CBD have remained stable for the past 6 months, it has moved up to the 10th position primarily due to other global cities declining significantly in office rentals.

In New Delhi, rents for Grade A offices in the CBD strengthened, edging up 4.5 per cent q-o-q thanks to improved market sentiment and the lack of new supply.