With annual occupancy cost of US$149.71 per sq ft, New Delhi’s Central Business District (CBD) of Connaught Place ranks as the seventh most expensive prime office market in the world. Mumbai’s Alternative Business District of Bandra Kurla Complex (BKC) is at 19th position and the city’s Central Business District of Nariman Point is at 34th position, according to the latest edition of CBRE Research’s Global Prime Office Occupancy Costs bi-annual survey released today.
Global prime office occupancy costs — which reflect rent, plus local taxes and service charges for the highest-quality, prime office properties — rose 2.4% year-on-year. In Asia Pacific, prime office occupancy costs are growing at a faster pace than average, up 2.7% year-over-year. A few key Southeast Asian markets registered decreases, including Singapore and Jakarta.
Anshuman Magazine, CMD, CBRE South Asia, said, “Over the past year, the commercial real estate market inIndia has witnessed positive movement. At rank seven, Connaught Place (CP) continues to attract occupiers and witnesses steady leasing activity for front office space. Its central location and ease of connectivity continues to attract big corporates – especially banks, other financial institutions and engineering firms. Overall, India continues to be a preferred destination for various multinationals to expand their current operations or to set up their offices due to adequate supply of quality office space.”
Hong Kong (Central) became the world’s highest-priced office market with an overall prime occupancy costs of US$290 per sq. ft. per annum. Asia continued to dominate the list of the world’s most expensive office locations, accounting for seven of the top ten markets, according to the survey, Beijing (Finance Street) (US$188 per sq. ft.), Beijing (Central Business District (CBD)) (US$182 per sq. ft.) and Hong Kong (West Kowloon) (US$179 per sq. ft.) rounded out the top five positions. Apart from New Delhi (Connaught Place – CBD), Tokyo (Marunouchi/Otemachi), and Shanghai (Pudong) also featured in the top ten list.
The study revealed that 22 markets moved more than three rankings upwards with 41% of these in Asia Pacific. The majority of these markets (72%) are not global gateway cities, indicating that as rents continue to rise in line with economic growth, cost-conscious companies are seeking space in the less expensive markets. About 41% of the markets moving up are in Asia Pacific, which indicates that the region is still growing despite the economic slowdown in China.
CBRE tracks occupancy costs for prime office space in 126 markets around the globe. Of the top 50 most expensive markets, 20 were in Asia Pacific, 20 in Europe, the Middle East and Africa (EMEA), and 10 in the Americas.