Mumbai: Possibly for the first time ever, the house rents in the national capital region have surpassed that in Mumbai, the country’s financial capital where commercial real estate has long been considered prized.
The South Mumbai business hub of Nariman Point has traditionally commanded the highest rentals in India, and has been among the top 10 costliest spaces in the world. But, a new report shows that rents here have slipped considerably.
The report on the Asia-Pacific office market by property consultants Cushman and Wakefield shows that Connaught Place in Delhi has upstaged Nariman Point and Bandra-Kurla Complex, as far as office space rentals are concerned. The NCR has risen to the fifth place on the Asia-Pacific rental chart, while Mumbai has slipped to the tenth position.
Piyali Dasgupta from Cushman and Wakefield said the reversal is mainly due to the fact that in Mumbai, most offices are moving to cheaper and larger offices to the north of the city. “Unlike Mumbai, where Bandra-Kurla Complex, Andheri or Lower Parel offer plenty of supply, the alternatives to Connaught Place are at some distance in Delhi. So while demand is on the wane at Nariman Point, at Connaught Place there is still a strong quality demand from consulting firms, banking, financial services and insurance and media companies,” she said.
A RICS India Commercial Property Survey report adds that while demand for office space still remains relatively sluggish, there has been some uptake in absorption this quarter as compared to previous months.
“There has been a clear preference for cost efficient locations, which is the reason why traditional high cost locations have seen a slight correction, while cities such as Bangalore, Delhi and Bangalore have seen a stable rise,” said Ravi Ahuja, executive director of office transactions at Cushman and Wakefield.
Ahuja said while the Asia-Pacific market is expected to remain strong due to favourable economic and fiscal policies, the impact of the Euro zone crisis is still uncertain. Hong Kong, Singapore and Tokyo have retained their top three positions as far as expensive office spaces are concerned.