New Delhi: Setting up an office is most expensive in the national capital region in terms of rental cost across the country while it is fifth costliest place in the entire Asia Pacific region, a study has found.
The country's second most expensive location Mumbai is the only other Indian city among the 10 most expensive locations in Asia Pacific in terms of office rentals (at 10th place), as per the study by consultant Cushman & Wakefield.
The list is topped by Hong Kong as the most expensive Central Business Districts (CBD) across Asia Pacific, followed by Tokyo, Beijing and Singapore in the top five, C&W said in its office market report that compared the rental values of Central Business Districts (CBD) across Asia Pacific.
The monthly office rentals of NCR stood at Rs 366 per sq ft, meaning an office space measuring about 1,000 sq ft would entail a monthly rent of about Rs 3.7 lakh.
"Rentals in the New Delhi CBD locations have surpassed rental values prevailing in the Mumbai CBD and Bandra Kurla Complex (BKC)," the report said. Office rentals of Mumbai stood at Rs 275 per sq ft a month.
Among the Indian cities, Delhi-NCR and Mumbai are followed by Kolkata, Bangalore, Chennai, Pune and Hyderabad. Among the major cities in entire Asia Pacific region, Bangalore and NCR saw the maximum rise in the office rentals in the quarter ended March, from the previous quarter.
While Bangalore CBD recorded an increase of 18 per cent in its office rental during the quarter ended March as compared with the previous quarter, the NCR (CBD) witnessed about 14 per cent rise in rentals during the period under review.
The other places in 10 most expensive locations include Sydney (6th), Shanghai (7th), Perth (8th) and Brisbane (9th). "CBD locations across most cities of Asia, particularly Hong Kong, had witnessed a significant run up in rental and capital values over the last year.
"However most Asian markets are currently depicting signs of stability, with some key emerging markets of India still showing growth owing to the sustained demand generated specially from Banking & Consultancy, Automobile, Engineering and Pharmaceutical sectors," C&W India Executive Director (Office Transactions) Ravi Ahuja said.
He added that there has been a clear preference for cost efficient locations, which is clearly being reflected in slight correction in rental values of traditional high-cost locations and cities such as NCR and Bangalore have seen a stable rise.
"The Asia Pacific market is expected to remain strong with a GDP growth forecast of approximately 5.7 per cent in 2012 and 5.9 per cent in 2013," Ravi said, adding that the growth is expected to be driven by the domestic demand supported by favourable economic and fiscal policies.
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