CP beats Manhattan in office rents

NEW DELHI: Connaught Place is the world’s seventh most expensive office space with rents beating those in the popular New York financial district of Downtown Manhattan

NEW DELHI: Connaught Place is the world’s seventh most expensive office space with rents beating those in the popular New York financial district of Downtown Manhattan and, closer home, Mumbai.

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Slipping one rank in CBRE Research’s Global Prime Office Occupancy Costs bi-annual survey, the Central Business District (CBD) of Connaught Place has an annual occupancy cost of around Rs10,000 ($149.71) per sq ft per annum, which includes rent, local taxes and service charges. In comparison, the going rate at Downtown Manhattan, ranked 26th, is approximately Rs5,700 ($86.08) per sq ft per annum.

Hong Kong (Central) tops the global list (around Rs19,400 per sq ft per annum) followed by London-Central. Two market districts in Beijing and another in Hong Kong round up the top 5, while Tokyo takes the sixth spot ahead of CP.

Connaught Place attracts big corporates, especially from the services sector — banks and financial institutions, travel companies, law and engineering firms — due to its central location and proximity to government offices.

Anshuman Magazine, CMD of CBRE South Asia, said the factors taken into account were “quality of construction, maintenance and facilities management, quality of tenants and supporting infrastructure in and around offices”.

“The reason why rentals are highest in the CBD is because there is very little new A-grade office supply currently available in the area. This demand-supply mismatch has resulted in high rentals in Connaught Place,” he said.

In comparison, he said, Mumbai has quality office space options available in both the Bandra Kurla Complex — ranked 19th with rentals of around R6,300 ($94.79) per sq ft per annum — and Nariman Point — ranked 34th at R4,800 ($71.49) per sq ft per annum.

In Delhi’s neighbourhood, Gurgaon is popular with IT firms and BPOs but its distance from the Capital means rentals are around R3,000 ($46.14) per sq ft per annum.