Nariman Point is the fifth most expensive office location in the world. Rentals here have zoomed 60% to Rs 546 per sqft per month during the year, according to the latest survey released by global consultancy firm Cushman & Wakefield. The steep rise saw Nariman Point go up from the seventh slot in the previous rankings.
Delhi broke into the top 10 with rentals in the Connaught Place area, the central business district (CBD), estimated at Rs 423 per square foot a month. Despite talk of moderation in the real estate arena, rentals in the area have increased 46% during the year.
In the global market, Asia emerged as one of the highest growth markets. And in Asia, India is the main driver. According to the report, within the Asia-Pacific region, India captured three of the top 10 most expensive locations with Mumbai-Nariman Point and Central Mumbai-Worli on third and fourth position respectively and New Delhi’s Connaught Place at sixth position in Asia-Pacific. In fact, the significant rental growth witnessed in India has placed eight Indian micro markets in the top 10 locations in terms of rental growth in Asia-Pacific region. The central business districts of Mumbai and Delhi are costlier than the most posh office areas in cities like New York, Washington, San Francisco, Rome, Zurich, Shanghai, Dubai and Frankfurt.
While Nariman Point moved up a few notches in the latest survey, Mumbai Central slipped two places to seventh position during 2007.
The change in the ranking was mainly due to the 60% rise in rentals in Nariman Point compared to 33% in Central Worli. Other areas like Suburban Powai saw rentals rise 80% during the year to Rs 110 per sqft a month.
In the northern region, Gurgaon prime, which includes areas like DLF Phase I and office space on NH-8, witnessed the highest appreciation of 47% with rentals rising to Rs 113 per sqft a month.
India is still the best performer in the office space market in the world, with average rentals growing around 36% as against an average rise of 25% in the Asia-Pacific region. In the US, rentals rose 18% and Europe saw a 14% increase.
Executive managing director of Cushman and Wakefield, South Asia, Sanjay Verma, says that most micro-markets in Mumbai saw an upward trend in rental values due to low vacancy and lack of new supply as projects were delayed. However, high rental values across the country are not sustainable beyond the next 12 months, given the significant IT-specific real estate supply planned in 2008, he added.
The review said that the rental growth across the world has been driven largely by a lack of supply in the face of strong demand. Vacancy rates have fallen considerably in many markets over the year, but developers have remained relatively cautious.
The highest growth in rentals was achieved by Kolkata’s Rashbehari Connector with an increase of 86% to Rs 65 per sqft a month, followed by Powai in Mumbai at 83%, Andheri and Malad recorded 71% and 64% respectively.
In the southern cities, Hyderabad’s CBDs Begumpet and Raj Bhavan Road emerged as the highest rental riser at 44% to Rs 52 per sqft per month while other markets within cities like Pune, Chennai and Bangalore witnessed increase of 27%, 24% and 26%, respectively. In Bangalore, CBD rentals went up to Rs 73 per sqft a month. var RN = new String (Math.random()); var RNS = RN.substring (2,11); var b2 = ‘ ‘; if (doweshowbellyad==1) bellyad.innerHTML = b2;