Real Estate

Why Connaught Place is world’s 4th most expensive office location

Connaught Place has a wide variety of retail outlets, shops, emporia, cinema halls and restaurants. CP is accessible through road and the Delhi Metro.

Connaught Place (CP) and its surroundings has, for long, been the centre of socio-political and economic activities of New Delhi. It is not only the capital's central business district (CBD) where many offices of the central government, banks and companies are located but also one of the most popular high-street shopping centres of the city. It has a wide variety of retail outlets, shops, emporia, cinema halls and restaurants. The place is equidistant from most major residential pockets and accessible through intricate road network and the Delhi Metro.

Historically, Connaught Place has been the most sought after district for headquarters and front offices of Indian companies due to the prestige and value addition it lends. Many domestic and international companies maintain their front offices for visibility here but take up mid-scale to large spaces in suburban locations such as Gurgaon and Noida that offer newly constructed commercial offices with efficient designs and better facilities. These are just enough reasons for anyone to book commercial space here at CP, who needs to establish their brand presence and visibility. Depending on one's affordability and availability of space.

The importance of the space can also be read from the fact that some of the most revered global brands across services and products have their established presence here. Among the major companies that have their offices in Connaught Place are Citibank, ING Vysya, Lufthansa, Reliance, LIC, Air India, TV Today, Standard Chartered, HSBC Bank, Rolls Royce, BNP Paribas, and Reuters among others. Connaught Place, by virtue of its century long legacy, available office space have been graded into A, B and C categories based on the age of the quality of construction, superiority of location, amenities, services and ability to attract highest paying occupiers. Grade A buildings have the highest rentals, Grade C have the lowest.

Limited availability of Grade A space has led to fewer transactions in a commercial office. Rents have increased by 25 per cent in 2012 and the location has become the fourth most expensive office location across the world. The average rental values for Grade A commercial space ranges from Rs 350-450 per sqft per month. With extremely limited Grade A stock (around 1 million sq ft) currently present in the micro market, most Grade A office buildings are close to fully occupied and therefore owners are in a position to charge high premiums.

There are also some Grade B office spaces available for both sale and on lease. Nonetheless, lease transactions are more common and rentals for Grade B office spaces are quoted in the range of INR 200-325 per sqft.

Connaught Place has very low vacancy rates and at the end of the fourth quarter of 2012, whilst the overall vacancy rate stood at 5.2 per cent, Grade A commercial spaces stood at 4.3 per cent.

Sanjay Dutt, Executive Managing Director (South Asia), Cushman & Wakefield | Published in ET