Knight Frank Global Cities report

Among the top fifteen global cities, Mumbai slips to the 10^th rank in 2014 from being 6^th in 2007 in terms of office rentals – Knight Frank Global Cities report

Mumbai, September 24, 2014: Knight Frank today launched its inaugural research report- Global Cities – 2015. The report assesses the office markets of Mumbai and 14 other global cities of more than 1.1 billion new urban dwellers and forecasts for the next 5 years.

Key takeaways:-

·         Among the top 15 global cities, office rentals in Mumbai are the lowest at Rs. 250 per sq. ft./ month as compared to London & New York which stand at Rs. 900 and Rs. 360 per sq. ft./month respectively

·         Going forward, Mumbai’s office rentals are expected to grow by nearly 15% over the next five years  

·         Current vacancy levels within the Mumbai office market lies at 23%, the highest as compared to the top 15 global cities

·         In contrast, rental yields within the city’s office market is also the highest at 10.3% as compared to cities like Sydney, Washington and Shanghai which offer rental yields of 6.3%, 6.2% and 6% respectively 

·         Price appreciation across Mumbai’s prime residential areas has been the least over the last five years among the top 15 global cities

The Table below projects the growth in office rentals across 10 global cities over the next five years (2014 -19)

	Rental Growth Ranking (% growth 2014-2019)
	City	%	2008-2013 ranking
1	San Francisco	36.2%	1
2	Madrid	28.7%	15
3	New York	28.2%	6
4	Singapore	25.0%	14
5	Sydney	22.3%	4
6	Washington	19.6%	5
7	London	16.3%	3
8	Mumbai	14.9%	13
9	Tokyo	13.4%	11
10	Mexico City	10.6%	7

Speaking about the findings, Dr. Samantak Das, Chief Economist & Director of Research, Knight Frank India said “The delayed revival of the Indian economy coupled with lack of business confidence has taken a toll on the Indian office market. This has led to Mumbai slipping from the 6^th to the 10^th rank in terms of the Global Cities rental ranking between 2007-14.While rental decline has been the primary reason, a depreciating rupee added fuel to the fire.”

Added Nicholas Holt, Head of Research, Knight Frank Asia Pacific, “Technology and IT sectors have been the key drivers of the take-up of office space in Asia. Financial services and banking, the sectors that led the pre-Global Financial Crisis  boom, continue to be more cost conscious, and while there is still demand from these sectors, there has been less ‘front’ or ‘prime’ office demand. Over the coming years however, we expect financial services and banking occupiers to come back to drive sizeable segments of demand.”