Image courtesy: BCCL
Nariman Point fell to the 15th place from its previous eighth position as the most expensive central business district (CBD) in the world, according to the annual report 'Office Space Across the World 2012' by Cushman & Wakefield.
The report released on Tuesday said this is also the first time in over six years that Mumbai has fallen out of the Top 10 rent rankings. Hong Kong, London and Tokyo maintained their position as the top three on the annual chart; Beijing (5) and Sydney (7) entered the top ten list for the first time.
Why Nariman Point's Rental Dropped
Ravi Ahuja, executive director, Cushman & Wakefield, India, said, "The decline of Mumbai's CBD rentals is reflective of two very important aspects; firstly, that other micro markets across Mumbai are witnessing a growth vis-à-vis the CBD. Secondly, that there is a certain amount of rationalisation in rentals in locations that had seen unprecedented rise in peak periods of 2007-08. Nariman Point has seen a steady and perhaps a planned decline in the past few years as other micro markets like BKC and Lower Parel recorded a corresponding rise. BKC was consciously planned to decongest the CBD and we see this phenomenon setting in."
The report said that Nariman Point saw a rental decline of approximately 8 per cent in 2011, allowing it to slip in global ranking, largely due to diminishing interest on account of higher prices, lower quality and age of construction and growing distances from residential hubs. In contrast to this, locations such as Bandra-Kurla Complex (BKC), Worli-Lower Parel and Andheri-Kurla Road offer larger floor plate and higher quality of construction whilst being closer to residential hubs. BKC has been inching up in terms of rental values (6 per cent) owing to a steady demand. While locations such as Andheri-Kurla and western suburbs cater to back offices.
Asia-Pacific recorded the steepest regional prime office rental increases in 2011 according to the report. "Overall, rents across the region increased by an average of 8 per cent, with Beijing recording the highest jump in rents globally (75 per cent). Hong Kong maintained its position as the most expensive office location in the world for the second year running, with Tokyo in the third," it said.
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