Published & Updated as on - 2010-02-25
KOLKATA: For those who believe
Kolkata as a business destination has been out of favour after the
unceremonious exit of Tata Motors' Nano project in October 2008, a Realty check
offers an interesting insight into the reality. Office space rentals in Kolkata
remain higher than the more fancied Bangalore, Chennai and Hyderabad. The clear
indication is that the business demand is still robust. Only Mumbai and Delhi
have more expensive office space.
A study by global realty
consultant Cushman & Wakefield revealed that the Burrabazar-BBD-Esplanade
area-Park Street belt that comprises Kolkata's central business district (CBD)
commands a rent of Rs 98/sqft, way over Gurgaon prime commercial (Rs 77),
Bangalore CBD (Rs 73), Pune CBD (Rs 55), Chennai CBD (Rs 55) and Hyderabad CBD
(Rs 50).
What's even more surprising is that rents in
Kolkata have been least affected by the downturn that sparked a major price
correction in the real estate sector across the country. While rent in the
city's CBD is down 7% against last year, the rentals erosion elsewhere is 10%
to 28%.
But despite the 20% rent correction, office space in
Nariman Point, Mumbai's CBD, remains the costliest in the country at Rs 300/sq
ft ($107/sq ft/year). It is also the fifth most expensive location globally
after Tokyo ($190), London West End ($161), Hong Kong CBD ($160) and Dubai CBD
($120). New York Midtown ($105), Moscow CBD ($102), Paris CBD ($102), Milan CBD
($89) and Zurich CBD ($88) are all cheaper than Mumbai.
Worli
follows next at Rs 250/sqft despite a 23% correction. Connaught Place in Delhi
at Rs 242/sqft is the next in line followed by again two districts in the
western metropolis Bandra-Kurla Complex (Rs 240/sqft) and Lower Parel (Rs
180/sqft). The office space at other CBDs in National Capital Region is in the
151-167 bandwidth followed by Andheri in suburban Mumbai at Rs 110/sq ft.
The
rentals at Kolkata's Park Circus Connector (Rs 60/sqft) and Rash Behari
Connector (Rs 57/sqft) is higher than the CBD rent of Chennai (Rs 55/sqft) and
Hyderabad's Banjara Hills (Rs 50/sqft).
Cushman & Wakefield India executive director (occupier services) Arvind
Nandan said: "While the early part of 2009 was a reflection of the
economic slowdown mirroring the rest of the world, by the latter part of the
year, there were signs of stability and also revival. This is evident from the
fact that more established markets like London (-25%) and Hong Kong (-35%) have
seen equal or higher rental correction in the same period. Most micro-markets
across India started to record stable rentals indicating a gradual revival in
demand. This trend is likely to remain constant in 2010, where we expect rental
values to remain stable with a strengthening bias across established markets.
Locations with a surfeit of IT/ITeS development may, however, experience
further softening of rentals in early 2010, albeit at a much lower rate than
before."
Rentals at IT/ITeS hub Salt Lake Sector V have already declined by 13% and are
now hovering around the Rs 42/sqft mark with possibility of further decline
till the sector regains momentum in the second half of the year. Maintaining
last year's position within the Asia Pacific region, India captured three of
the top 10 spots with Mumbai CBD, Mumbai Worli and New Delhi CBD at third,
fourth and fifth positions respectively.
Source: The Times
of India 24/2/10
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