Mumbai's office market is distorted by two major factors, which are holding back its graduation to a `world city' status: the Rent Control Act of 1947 and the strategic planning policy, which prevents setting up of new office in south Mumbai, the study says.

The above is one of the key conclusions arrived at in the report, ``The myths and realities of the Bombay Office Market,'' which bagged the award for the best market research paper on real estate in London recently.

Jointly researched and prepared by Jeff Marsh of India Property Research, a private research company in India and international property consultants Chesterton Megharaj, the report gives an in-depth analysis of the Bombay office Market.

The 76-page descriptivereport priced at little over Rs 12,000 provides an exhaustive overview and analysis of the Mumbai office-space market.

It is worth a buy for any multinational company planning to set up office in Mumbai. The report, by its own admission, is descriptive and not prescriptive.

The point where the report differs from conventional wisdom is that it argues strongly against the oft-repeated theory that new development should continue to be severely restricted in south Mumbai to reduce congestion and that development focus should shift to areas further north in the city, away from the centre, in regions known as Bandra-Kurla, the suburbs of Mumbai and Navi Mumbai.

It gives elaborate details on all property related legislations, summary of office costs and description of leading international companies and foreign banks with a office in Mumbai. It even has a chapter on the expatriate factor.

The report dwells at length on the important issue of the development of the mill land in Mumbai. The surplus land inthe mill district is estimated to be over six million square feet, enough to provide housing for at least 3,00,000 people. There are 58 cotton textile mills out of which 26 have been declared as sick by the National Textile Corporation.

Despite the property slump in 1996, offices and housing are still hugely overpriced, in relation to competing international centres, and in comparison to the quality of product available, the report points out.

According to the report, Nariman point is losing some of its commercial magnetism for overseas companies. But in the medium- and long-term demand is fundamentally strong from companies already based at Nariman Point. But for the time being, however, cost savings are high on their agendas and that may increasingly mean looking at the very least to relocate "back office" elsewhere.