25 Feb :Delhi and Mumbai have dropped two notches in the list of the most expensive cities in the world, thanks to softening realty prices and ongoing economic slowdown.
According to realty consultant Cushman & Wakefield (C&W), Connaught Place in New Delhi and Nariman Point in Mumbai has been ranked at 12th and 6th places respectively in the list of most expensive office locations, in which Honk Kong topped.
"In Mumbai, IT/ITeS and BFSI (banking, financial services, and insurance) sectors continued to remain the principal demand drivers, while the city witnessed increased demand from other sectors like pharmaceuticals, aviation, infrastructure and real estate developers, albeit their contribution to overall demand was marginal," C&W Managing Director Anurag Mathur said.
The other cities that ranked above Mumbai are Tokyo, London, Moscow and Dubai.Paris, Damascus, Abu Dhabi and Singapore also found berth in the list of the twelve most expensive cities.
"With the slowdown in the global economy, many corporates eased or postponed their expansion plans in Mumbai resulting in subdued demand for office space. As a result Mumbai witnessed an overall vacancy of about 12 percent in 2008, which is significantly higher than the previous 4-5 percent of vacancy recorded in 2007," C&W said.
The consultant pointed out that Worli, which came at the 10th position, witnessed a correction of about 13 percent in rental values in 2008 over the previous year.
It recorded a vacancy of about seven percent last year as against two percent in 2007.
The report by C&W compares office occupancy costs in 202 key locations in 57 countries around the world. Of these, 58 percent showed rental growth, 26 percent saw stable rents and 16 percent showed a rental fall in 2008.
However, globally office rent rose by an average of three percent last year, which was significantly below the 14 percent growth achieved in 2007, the consultant said.