Mumbai Office Space Second Only to London

India’s real estate market is growing by leaps and bounds. Growth and development has pushed India’s financial and commercial capital, Mumbai, to being one of the most expensive cities for setting up office. New Delhi, figures on the top ten list as well, coming in eight. London tops the list according to research conducted by Real Estates Broker firm CB Richards Ellis.

While this illustrates the development and growth of the economy, it also shows that there is definitely a dearth for office space. Moreover because of such high rates, investors should think twice before investing in Mumbai or Delhi. The cost in square feet at Mumbai’s Nariman Point has risen 55 per cent over last year to $189.51 (occupation cost in US $/sq ft/annum).

So, what is the general consensus out there? Many are not too happy with the news. Of course this means shelling out more dough. And no one in their right frame of mind would want to do that. Most of us do not trade in property, but we would need the extra space for expansion of our business. This will squeeze liquidity and cash flow. The government needs to take charge, develop more infrastructure, reduce property prices.Moreover, Mumbai will loose out with all the BPO’S and KPO’S who won’t be able to afford the high rents and so will set up base in smaller cheaper cities.For now, the bottom line is - you might want to think twice before setting shop in Mumbai or Delhi since obviously setting up an office in Dubai or New York is cheaper. Tsk!Tsk!

Most Expensive Commercial Space by City

City	US$ per sq ft
London ( West End)	328.91
Mumbai	189.51
London City	180.8
Moscow	180.78
Tokyo ( Inner Circle )	178.61
Tokyo (Outer Circle)	154.56
Paris	127.48
New Delhi	126.73
Dublin	113.66
Hong Kong	106.31

(Source: CB Richard Ellis Global Research report Global Market Rents, November 2007.)