The Hindu Business Line : `Delhi has world's 14th highest commercial rents'

The release said that both Hyderabad and Chennai witnessed a large demand for industrial space created by IT, engineering, pharmaceutical and automobile sectors, which had caused rental increases.

Chennai April 24 Delhi, with total occupancy costs of Rs 4,823 a sq m a year, is the 14th most expensive industrial location in the world as at December 2006, according to a study conducted by global real estate consultants Cushman & Wakefield.

The study — Industrial Space Across the World 2007 — shows that Delhi has moved to the 14th position from 23rd the previous year, with prime industrial rents up 33 per cent.

Three cities — Mumbai, Delhi and Bangalore — figure among the top 10 cities in terms of percentage rise in rentals. Hyderabad, where rentals went up by 23.1 per cent during January-December 2006, is placed 12th for percentage rise in rentals.

A press release quoted Mr Sanjay Verma, Executive Managing Director, Cushman & Wakefield in South Asia, as saying that manufacturing was undergoing a renaissance in India as export volumes rose rapidly. In Mumbai and Delhi, a shortage of space had pushed up rents and resulted in manufacturing and logistics activity shifting to industrial parks outside the cities.

He said international manufacturers in automobile, biotechnology, pharmaceutical and telecommunications sectors favoured setting up operations in the economically flourishing states of Gujarat, Maharashtra, Andhra Pradesh and Tamil Nadu. Bangalore had over 50 functional industrial areas and several smaller industrial pockets, but it faced a tremendous supply crunch that was unable to meet the demand triggered by logistics, garments, engineering, cement, aeronautics and pharmaceutical industries. This demand-supply mismatch could also be because of lack of government-allotted land and supply being made up of resale and commanding a high premium.

The release said that both Hyderabad and Chennai witnessed a large demand for industrial space created by IT, engineering, pharmaceutical and automobile sectors, which had caused rental increases.

Cushman & Wakefield's study says that the area around London's Heathrow airport retains its position as the world's most expensive industrial location; 1 sq m of prime industrial space at London Heathrow costs 252 (Rs 13,860) a year to occupy. Me'ouyan Soreq district in Rishon Le-Zion in Israel is the second costliest city at 207 (Rs 11,385) a sq m a year and Tokyo came third at 154 (Rs 8,470).

The study looked at 85 of the world's top industrial locations. The main global ranking is complied by taking the most expensive location in Euro terms in each of the 45 countries monitored.

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