Office rents in Dubai have become more expensive than Manhattan in New York City, and could soon exceed those in the white hot Mumbai market, CB Richard Ellis (CBRE) said on Thursday.
The global commercial property services firm said in a report that Dubai rents leapt 30.7% in the past 12 months to March 31, making the city the 10th most expensive in the world.
Mumbai rents increased by just 11.3% over the same period; causing the city to slip from second to fourth in the world rankings.
There is still some way to go before Dubai overtakes Mumbai. The price per square foot in Dubai this year is $128.45 compared to Mumbai's $210.97.
A small office for 30 people, based on an average 100 square feet per person, will now cost $309,600 per year in Dubai, up from $294,960 only one year ago.
CBRE said London's West End was once again the world's most expensive office market, followed by Moscow, Tokyo's Inner Central Five Wards, Mumbai and Tokyo's Outer Central Five Wards.
Ho Chi Minh City in Vietnam had the fastest-growing occupancy costs during the period, up 94%, followed by Moscow (93%) and Singapore (86%), the firm said.
Overall, the Europe, Middle East and Africa (Emea) region dominated the list of markets with the fastest growing occupancy costs, accounting for five of the top 10 and 19 of the top 50 markets, CBRE said.
Worldwide, 88% of the 173 office markets monitored posted higher occupancy costs, it added.
"Office occupancy costs are continuing to defy sluggish economic conditions and the credit crunch, as they rise faster than global inflation," Raymond Torto, CBRE's global chief economist, said in a statement.
"These cost increases are dominated by emerging markets, caused by both supply and demand imbalance and the depreciation of the dollar relative to local currencies. In some of these emerging markets, Class A office space is seriously lacking."
The top ten most expensive cities to rent office space:
London (West End), England- $299.54 per square foot Moscow, Russia- $232.37 per square foot Tokyo (Inner Central), Japan- $220.25 per square foot Mumbai, India- $210.97 per square foot Tokyo (Outer Central), Japan- $175.35 per square foot London (City), England- $164.18 per square foot New Delhi, India- $145.16 per square foot Paris, France- $141.98 per square foot Singapore, Singapore- $139.31 per square foot Dubai, UAE- $128.49 per square foot (source: CB Richard Ellis)For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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