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Connaught Place world’s fourth most expensive

Registers 25% growth in rental values over the previous year

Press Trust of India  |  New Delhi 

New Delhi’s (CP) emerged as the world’s fourth most expensive location in 2012, moving up by a notch, in a global study conducted by Cushman & Wakefield. West End Area (London) tops the list, followed by Central Business District (CBD) in Hong Kong and Zona Sul (Rio de Janeiro, Brazil).

London and Hong Kong swapped positions in 2012, as they had occupied the second and first slot, respectively, in 2011. Rio de Janeiro displaced Tokyo’s CBD to the fifth position and occupied the third position in 2012.

“India’s corporate space has been limited, with the majority of development being in the information technology/enabled services space. Therefore, locations that offer corporate 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 such as banking, financial services and insurance (BFSI), engineering and consulting firms, media and entertainment, amongst others leading to an increase in rental values for these locations,” said Cushman & Wakefield’s South Asia Executive Managing Director Sanjay Dutt.

The global markets and 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, added Dutt.

CP registered a growth of 25 per cent in rental values over the previous year. Because of its proximity to establishments including government organisations, trading centres and retail location, demand for quality office space has been high in the area. It is also a top priority for sectors such as BFSI, consulting, trade and media. The fresh supply in CP has come up owing to redevelopments and renovations of existing buildings, which have been commanding a premium and becoming instrumental in pushing average rental values upwards.

“The rental values of this location will remain high. However, limited activities in the location on an ongoing basis are expected to keep values contained, notwithstanding the fact that location may have already reached peak pricing,” said Dutt.

In the Asia-Pacific, New Delhi, Chennai and Bangalore occupied second, third and fifth slot for cities with largest rental growth. CP recorded a rental growth of 25 per cent with $162 sq. ft per year, CBD in Chennai recorded a growth of 13 per cent with $27 sq ft per year and CBD in Bangalore a growth of eight per cent $35 sq ft per year. The first slot was occupied by CBD in Jakarta, Indonesia, with a rental growth of 46 per cent at $55 sq ft per year, while the fourth slot was taken by Futian, Shenzhen (China) with a rental growth of 11 per cent at $60 sq ft per year.

First Published: Thu, February 21 2013. 00:40 IST