New Delhi Is The World’s 4th Most Expensive Office Location

Chennai:  New Delhi’s Connaught Place and Mumbai’s BKC locality have emerged as world’s 4^th and 8^th most expensive office location, respectively, while Chennai’s Central Business District scored third in terms of highest rental growth in Asia, according to world-wide survey.

Global real estate consultant Cushman and Wakefield in its latest report ‘Office Space Across the World 2013,’ has found that London’s West End as the world’s most expensive office market regaining its position from Hong Kong’s Central Business District (CBD) in a gap of five years, while Rio de Janerio in Brazil captured the third position ahead of India.

The report, which has screened locations across 63 countries to compare the most expensive office destination across the world, said, Tokyo (5^th) and Beijing (7^th) lost two and one positions respectively over previous year survey. Retaining their positions from last year Sydney on ninth and Paris on tenth, complete the top ten, the report further said.

Sanjay Dutt, Executive Managing Director, South Asia, Cushman & Wakefield said, “India’s corporate office space has been limited with majority of the development being in the IT/ITeS space. Therefore locations that do offer corporate office space such as CBD, off CBD, and select micro markets in the suburban districts have witnessed high rental values. Demand for corporate office locations have remained buoyant especially from sectors like BFSI, engineering and Consulting firms, media and entertainment amongst others leading to increase in rental values for these locations.”

Sanjay Dutt, further added, “The global markets and indeed the Indian office markets have been affected negatively by the economic slowdown in European and American continent. There was a 23% decline in absorption in 2012 in India.  Most corporate are cautious and have concentrated on increasing  efficiency of their existing office spaces, alternate workplace strategy with remote or flexible work stations or hours. Relocation and consolidation at attractive terms is helping current space take up.”

Connaught Place, which emerged as the  4th most expensive office space in the world, has registered a growth of approximately 25% in rental values over the last year, to charge Rs 403 / sf/ month. Given that it is one of the oldest established office centres in India and is in proximity to other establishments like government organisations, trading centres and retail location, demand for quality office space has been high.

“The new master plan for New Delhi by the Delhi Development Authority has not provisioned for any rapid growth of office space within the city leaving very limited choice. Majority of the demand for office space is still being serviced by Connaught Place as the location has socio – political infrastructure. Limited quality corporate office space in Connaught Place has fuelled the northward march of the rental values,” Sanjay said.

“The rental values of this location will remain high, however, limited activities in the location on an ongoing basis is expected to keep values contained, notwithstanding the fact that location may have already reached peek pricing,” Sanjay Dutt further added.