Delhi’s Connaught Place — home to premium real estate, especially commercial property — continues to be among the most expensive office markets in the country.

According to international property consultant firm, JLL’s Premium Office Rent Tracker, the Connaught Place area has climbed up rankings in over a year – from 25 to 17 — with the average occupancy cost around $109 sq ft per year (approximately ₹8,271), making it costlier than San Francisco.

The rent tracker compares occupancy costs for premium office buildings globally. The current edition covers 127 office markets and sub-markets across 112 cities. Occupancy costs are calculated as the cost of net leasable area (actual area to be given on rent) and includes costs for an occupier, including the rent, service charges, and government taxes payable on the rent.

Occupancy costs

Mumbai’s BKC with an annual occupancy cost of $102 per sq ft (₹7,740 approximately) is the second most expensive Indian city office market. The city’s central business district stands at 63rd position globally with an annual occupancy cost of $58 per sq ft (₹4,401).

Annual occupancy costs remained stable at $51 per sq ft (₹3,870) for Bengaluru, while in Gurgaon, Delhi NCR, it decelerated from $48 per sq ft (₹3,642) to $44 per sq ft ( ₹3,339). If affordability is considered, Chennai with an occupancy cost of $21 per sq ft per year (₹1,594) is the fourth most affordable office market globally.

“Except Connaught Place in Delhi, and Bengaluru, all other major office market rental values have contracted, largely on account of the economic disruption in the wake of the second wave and landlords being flexible for existing and new tenants,” said Samantak Das, Chief Economist and Head of Research & REIS (India), JLL.

The BFSI and global capability centres are driving premium building rents in India. Premium markets of Connaught Place and Mumbai BKC are driven largely by banking and financial services firms, which is in line with the global trend. In Bengaluru’s case, global capability centres and technology companies are key occupier segments in its premium markets.