You would have had an inkling about this — office rentals in the city's Central Business District (CBD) are not just high, the rates have made pushed the district to the fifth spot for largest rental growth in Asia.
Office rentals in CBD have grown by 8 per cent in the last one year, and annually cost USD 35 per sq ft to a company seeking office space. The only areas with a higher growth rate are Indonesian capital Jakarta's CBD with 46 per cent, New Delhi's Connaught Place 25 per cent, Chennai's CBD 13 per cent and Futian in Chian's Shenzen 11 per cent.
The findings are from Cushman & Wakefield's 2013 edition of its annual survey 'Office Space Across the World'. The annual report of the global real estate consultant ranks locations across 63 countries to compare the most expensive office destination.
London’s West End is the world’s most expensive office market regaining its position from Hong Kong’s Central Business District (CBD) within five years, while Rio de Janerio in Brazil captured the third position ahead of India, according to the C&W report. Tokyo, Japan (5th) and Beijing, China (7th) lost two and one positions respectively over previous year survey. Retaining their positions, Sydney on ninth and Paris on tenth, completed the top ten.
In Asia-Pacific, Indian cities captured top positions in the largest rental growth charts, with New Delhi ranking 2nd recording an rental escalation of 25 per cent over last year. Chennai CBD (13 per cent) saw the 3rd highest rental growth in Asia followed by Bengaluru CBD (8%) at 5th position, Pune CBD (7 per cent) at 7th and Kolkata CBD at 8th (6 per cent) showing positive annual rental growth over previous years.
Sanjay Dutt, executive managing director (South Asia) for Cushman & Wakefield, said, “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 per cent decline in absorption in 2012 in India. Most corporates are cautious and have concentrated on increasing efficiency of their existing office spaces, alternative workplace strategy with remote or flexible work stations or hours. Relocation and consolidation at attractive terms is helping current space take up.”
In India, the top most expensive office space locations were largely distributed between Mumbai with five locations and NCR featuring three corporate office space locations in the in the top ten most expensive office locations in India. Mumbai featured high on the India list of expensive destination with BKC (2nd), Nariman Point (3rd) and Worli (4th).
