Delhi's Connaught Place 4th most costliest office location in world

Feb 20 2013, 21:43 IST
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SummaryLondon elbowed its way past Hong Kong as world's most expensive mkt in which to rent office space.

Connaught Place, located in the heart of the national capital, ranks 4th in the list of most expensive office locations in the world, according to latest report from property consultant Cushman and wakefield.

In 2011 ranking, Connaught Place was at fifth position.

"New Delhi's Connaught Place has emerged as world's 4th most expensive office location gaining one position over last year," Cushman and Wakefield said in a statement.

Connuaght place has an occupancy cost of USD 162 per sq ft annually, according to C&W's annual survey that has ranked locations across 63 countries to compare the most expensive office destination across the world.

London's West End emerged as the world's most expensive office market with an annual occupancy cost of USD 262 per sq ft, regaining its position from Hong Kong's Central Business District (CBD) in a gap of five years.

Zona Sul in Rio de Janerio (Brazil) has jumped to third position from 8th in 2011 ranking, while the CBDs of Tokyo (Japan), Moscow (Russia) and Beijing (China) are at fifth, sixth and seventh positions.

New York's Mid Town ranks eighth, and CBDs of Sydney (Australia) and Paris (France) are at 9th an 10th positions.

"New Delhi, Connaught Place, which emerged as the 4th most expensive office space in the world, registered a growth of approximately 25 per cent in rental values over the last year, to charge Rs 403 per sq ft per month," C&W said.

The demand for quality space in Connaught place is high considering that it is one of the oldest established office centres in India with proximity to other establishments like government organisations, trading centres and retail location, the consultant noted.

"Also gaining from the fact that there is limited supply of quality office space in the vicinity adds to its attractiveness," it added.

The fresh supply in Connaught Place is essentially due to redevelopments and renovations of existing buildings which have been commanding premium, it said.

"Majority of the demand for office space is still being serviced by Connaught Place as the location has other support socio-political infrastructure. Limited quality corporate office space in Connaught Place has fuelled the northward march of the rental values," Cushman & Wakefield South Asia Executive Managing Director Sanjay Dutt said.

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, he added.

Within Asia Pacific, the report said that Indian cities captured top positions in the largest rental growth chart, with New Delhi ranking 2nd -- recording an rental escalation of 25 per cent over last year.

Chennai CBD saw the 3rd highest rental growth in Asia followed by Bengaluru CBD at 5th position, Pune CBD at 7th and Kolkata CBD at 8th showing positive annual rental growth over previous years.

Connaught Place in New Delhi world's fourth most expensive market for office space

(Reuters) London elbowed its way past Hong Kong to regain the title as the world's most expensive market in which to rent office space, while Rio de Janeiro jumped to the No. 3 spot from No. 8, according to a report by global real estate services firm Cushman & Wakefield. New Delhi's Connaught Place was fourth on the list.

It was the first time since 2008 that London took the top spot. Competition for the scarce high quality office space in London fueled office rents by 2 percent in the city's West End bolstering rents sufficiently to leapfrog over Hong Kong, according to the report on Tuesday. Office rents in the West End are expected to continue to grow as the economy improves, Cushman & Wakefield said.

At 2,137 euros per square metre, or $262 per square foot, London's occupancy cost, which includes taxes and charges for cleaning and other services, are more than twice those of Paris, New York and Moscow.

Hong Kong's central business district dropped to second place. But the Zona Sul area of Rio de Janeiro barreled its way into the top three of the world's most expensive office locations, with rents up 43 percent over last year, the report said.

Globally, prime offices building rent rose by 3 percent, the report said. South America, particularly Brazil and Colombia, accounted for much of that growth, while many markets suffered under continuing economic uncertainty.

"Safe havens or gateway cities such as London, Hong Kong and New York continue to command high rents despite uncertain economic conditions, as they remain key markets in which to do business; while burgeoning population growth has led to rising occupancy costs in emerging markets in South America and Asia," Glenn Rufrano, Cushman & Wakefield president and chief executive said in a statement.

Rounding out the top 10 most expensive office markets at the start of 2013 compared with 2012 were:

* No. 4 Connaught Place, New Delhi; up from No 5

* No. 5 Tokyo central business district, 5 Central Wards; down from No. 3

* No. 6 Moscow central business district; down from No. 4

* No. 7 Beijing central business district; down from No. 6

* No. 8 New York, Midtown, Madison and Fifth avenues; down from No. 7

* No. 9 Sydney central business district; unchanged

* No. 10 Paris central business district; unchanged

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