Delhi's Connaught Place now world's sixth most expensive office hub

Connaught Place drops one place from previous report ranking in the world at rentals of $151 per sq ft per annum

At $151 (nearly Rs 10,100) a sq ft per annum, Delhi's Central Business District (CBD) of Connaught Place is ranked the sixth most expensive prime office market space in the world by CBRE Research's semi-annual Global Prime Office Occupancy Costs survey.

However, CP (officially Rajiv Chowk since the mid-1990s) has dropped one place from the previous report ranking. The latest survey provides data on office rents and occupancy costs as of end-September this year.

Mumbai's alternative business district of Bandra-Kurla Complex (BKC) was at 18th position, and the city's CBD of Nariman Point at 32nd in the Top 50 rankings for global prime office properties.

London's West End topped this 'most expensive' list, with overall prime occupancy cost of $273 a sq ft per year. Hong Kong (Central) was ranked second, with prime occupancy cost of $269 a sq ft per year. Followed by Beijing (Finance Street) at $191 a sq ft per year, Beijing (CBD) at $183 a sq ft per year and Hong Kong (West Kowloon) at $162 a sq ft per year. In total, the Asia-Pacificc was home to seven of the 10 most expensive markets globally, CBRE said.

Anshuman Magazine, chairman, CBRE South Asia, said: "Overall, the prime office market in India has been positive during the past few quarters, on the back of an improving economic climate. Connaught Place in New Delhi witnessed steady demand from leading corporate real estate occupiers in investment-grade buildings, mainly due to its central location."

Prime occupancy costs-rent, local taxes and service charges-increased at a 2.4 per cent annual pace globally, as the world economy continued to gradually improve and the service sector, a bellwether for prime office space, entered a fourth year of expansion, driving healthy demand for space in top-quality properties.

Prime occupancy costs in the Asia-Pacific increased by 1.9 per cent over a year, from 1.4 per cent in the first quarter of 2015, compared to 3.1 per cent growth in the Americas and 2.2 per cent in the Europe, Middle East and Africa region.

"The global services sector has grown steadily for four years, which helps to explain the general uplift in office rents and costs we are seeing worldwide," said Richard Barkham, global chief economist, CBRE. "Though some markets have been hit by the China, oil and commodity slowdowns, we expect most advanced economies will keep growing in 2016 and 2017, which, combined with limited availability and relatively muted development levels, will result in moderate two to three per cent cost increases."