Connaught Place costlier than Dubai

As per the bi-annual global prime office occupancy costs survey by realty consultant CBRE Group, New Delhi’s central business district of Connaught Place is the 9th most expensive office market in the world with an occupancy cost of $153.89 per sqft per annum. This makes Connaught Place costlier than Dubai, downtown Boston and Shanghai. As against this Mumbai’s Bandra Kurla Complex (BKC) is ranked 20th while the CBD of Nariman Point is ranked 33 on the list of the top 50 most expensive office markets around the world, says the CBRE report. 

CBRE India & Southeast Asia chairman Anshuman Magazine said, “Despite Connaught Place having limited supply of prime office space, its location in the heart of the national Capital, coupled with great infrastructure and connectivity to other parts of the city, makes it to be an ideal location for any business to be in.” With the commercial real estate segment continuing to do well in the country, prime locations across the country including Connaught Place and BKC and Nariman Point in Mumbai continue to witness demand for prime office space from occupiers, he noted. 

As per the report, Central in Hong Kong and West End in London remain the two most expensive markets in the world, while the top 10 list remains largely consistent. Central in Hong Kong is the world’s highest-priced office market with an overall occupancy cost of $302.51 per sqft per annum and with seven of the most expensive cities, Asia continues to dominate the list of the world’s most expensive office locations, the survey said. 

Hong Kong (West Kowloon) ($190.02 per sqft) and Beijing (CBD) ($183.10 per sqft) also feature among the top five most expensive markets this year. Global prime office occupancy costs, which reflect rentals plus local taxes and service charges for the highest quality, prime office properties, rose 1.9 per cent year-on-year which is lower than the growth rate in Q1 of 2016 (2.2 per cent). On the other hand, occupancy costs in the Americas rose by 3.6 per cent. Of the top 50 most expensive markets, 18 were in Asia Pacific, 20 in Europe and the Middle East and Africa (EMEA), and 12 in the Americas. 

In fact, less than a fortnight ago, the Knight Frank Asia-Pacific Prime Office Rental Index said, three Indian metros led by Bengaluru were among select global cities that saw sharp appreciation in office rents. Connaught Place and BKC were among global the CBDs witnessing sharp rental growth. The index compared rent hikes at prime office markets across 20 global cities between the first quarter of 2016 and this year. Despite the initial jitters of demonetisation, the key office markets in Delhi, Mumbai and India’s IT capital saw healthy surge in office rentals on a y-o-y basis. While Bengaluru recorded 4.7 per cent, established central business districts such as Connaught Place in Delhi (4.3 per cent) and Bandra-Kurla Complex in Mumbai (3.4 per cent) saw robust rental growths. 

The rise in rents was remarkable considering that the three cities collectively saw close to 2.4 mn sq. m of new office space added since the March ending quarter of 2016, the index says. Dr Samantak Das, Chief Economist & National Director, Research, Knight Frank India said, “There are disruptions in IT-driven office markets owing to geopolitical changes, automation and industry dynamics. But prime office markets in India appear as bright spots courtesy the inward-looking orientation of the industries driving them. Unlike IT-driven office markets which are linked to global fortunes, the prime office markets in India are driven by the Banking, Financial Services and Insurance (BFSI), manufacturing and consulting sectors.”

At $153.89 per sqft per year, Connaught Place is ninth most expensive office space. 

At $302.51 per sqft per year, Central in Hong Kong is the world’s highest-priced office market. 

At $190.02 per sqft Hong Kong (West Kowloon)) and Beijing (CBD) at 

$183.10 per sqft are in the top five expensive commercial spaces. 

Bandra Kurla Complex and Nariman Point are ranked 20 and 33 respectively, globally.