Mumbai office rents twice of Manhattan

MUMBAI: Despite the global meltdown, office rentals all over the world are expected to hold firm or increase in 2010 according to global property consultancy firm Knight Frank's annual projection for the year. Tokyo continued to command the highest office rents in the world during 2009.

Although Mumbai does not figure in the top ten global office rentals, its rentals are sometimes twice those of Manhattan. For instance if space opposite the Grand Central Station in Manhattan is in the vicinity of $3 to $4 (Rs 138 to Rs 184) a square foot a month, some of the commercial space in the Bandra-Kurla Complex commands as much as $7 (Rs 322) a square foot every month, according to Knight Frank. Prices in the central business district of Nariman Point are also in the same range.

According to the Knight Frank survey, despite substantial rental falls during 2009, eight of last year's top 10 still remained there. These are London (West End) at the second spot, Paris (3), Moscow (4), St Petersburg (5), Abu Dhabi (6), Dubai (7), Singapore (8) and Hong Kong (9) London's City Market (10).

St Petersburg and London's City Market returned to the top 10, moving up from their 2008 positions of 13 and 12 respectively.

Joe Simpson, head of commercial international research, Knight Frank, said, "A quarter of the cities surveyed are expected to see a fall in rents in 2010, but in most cases the degree by which rents will decrease will be marginal in comparison to the negative movement seen in 2009. The remaining 75% will, at worst, see rents holding firm with approximately half expected to show positive rental growth in the year ahead."

London's West End witnessed falls of more than 20% in Euro terms and Hong Kong, Dubai and St Petersburg saw rental falls in excess of 30%; Singapore saw rents more than halve in 2009.

New York saw one of the heaviest falls of all the major global office markets, with a 45% decline in Euro terms. "This has resulted in a plunge in New York's rank amongst the expensive major office markets from 15th at the end of 2008 to 21st at the end of 2009," the survey said.

More than half the cities surveyed by the consultancy firm are not forecast to see further rental decline in 2010, and 40% of the markets surveyed are expected to see growth in the coming year.

Although not officially included in the top 10 list, Luanda, Angola, commanded prime rents that outstrip those in Tokyo, London, Paris and New York. The best buildings in the capital of the resource-rich South-West African country commanded rents of up to Euro 1,500 a square metre per annum.