Connaught Place, located in the heart of New Delhi, has been ranked fifth in the list of world's most expensive office market owing to strong demand amid limited supply, property consultant CBRE said today.
Hong Kong (Central) with annual occupancy costs of USD 235.23 per sq ft topped the "most expensive" list for the third consecutive time, followed by London's West End, Beijing's Finance Street and Beijing's Jianguomen.
"India continued to feature in the list of World's most expensive office markets, with New Delhi (Connaught Place CBD) ranking at the 5th position (with an overall occupancy cost of USD 178.96 per sq ft per annum)," CBRE said in a statement today.
In its semi-annual Prime Office Occupancy Costs survey, CBRE has tracked occupancy costs for prime office space in 127 markets around the globe.
Mumbai's Bandra Kurla Complex (BKC) and Nariman Point is at 11th and 26th positions, respectively.
Commenting on the report, CBRE South Asia Chairman and Managing Director Anshuman Magazine said, "Despite a softening in the commercial office space segment in key cities in India, occupancy costs continue to remain high in prime locations such as of Connaught Place in New Delhi."
"This is primarily due to low supply of space with very limited new supply expected in the near future. This is especially true for quality office space which has led to occupancy cost remaining high," he added.
Strong demand coupled with Connaught Place's central location, excellent access to key regional markets and limited availability of prime office space, has fuelled the area's rising occupancy costs, the report said.
CBRE also noted that the gap in office occupancy cost between the CBDs such as Connaught Place and suburbs such as Gurgaon is enormous.
"Connaught Place finds mention in the top 5 list, while Gurgaon is at the 72nd spot in the same list. This is one of the foremost reasons why most corporate occupiers (particularly in the IT and allied services) continue to opt for cost effective office spaces in suburbs," CBRE said.
Other Asia-Pacific markets in the top 10 include Hong Kong-West Kowloon (6th) and Tokyo (Marunouchi/Otemachi) (8th). New York's Midtown Manhattan (10th) returned to the top ten markets for the first time since early 2012, joined by Moscow (7th) and London's City (9th).
"Globally, occupancy costs rose by a scant 1.4 per cent on a year-over-year basis as modest growth in the Americas and Asia Pacific was partly offset by a slight decrease in recessionary Europe," the statement said.