Average office rent in top 7 cities at Rs 33-Rs 166/sq ft; cost effectiveness to boost demand: Vestian

Average monthly rentals for prime office space in India's top seven cities are very low at $0.4-$2 (Rs 33-Rs 166) per square feet, which is one of the major factors driving demand for workspace from global firms, according to Vestian.

Real estate consultant Vestian on Sunday released rentals data for major cities globally, which showed that average rent in New York, London, Miami, Seattle and Boston is $40-$80 per sq ft per month.

Rentals in Hong Kong, Singapore and Shanghai are $3-8 per sq ft a month.

Vestian said the demand for office spaces in the medium to long term would remain strong in India's seven big cities because of cost-effectiveness.

Shrinivas Rao, CEO, Vestian, said: "Indian office market has grown leaps and bounds in the past decade due to robust demand from large multinational companies. These companies set up their operations in India to reap the cost benefits."

The demand for office spaces in India is expected to be buoyant amid current macroeconomic uncertainty across the globe as companies are majorly focusing on optimizing operational costs for their businesses, Rao added.

As per the data, the average per square feet monthly rentals in New York is $60-80, London $60-70, Miami $55-65, Seattle $45-55, Boston $40-50, Hong Kong $6-8, Singapore $6-8, Shanghai $3-4.

Among Indian cities, Mumbai commands an average monthly rentals at $1-2 per square feet, Delhi $0.5-1.5, Bengaluru $0.8-1.2, Pune $0.7-1.1, Chennai $0.6-0.9, Hyderabad $0.6-0.9 and Kolkata $0.4-0.7 per square feet.

In Mumbai's BKC and Delhi's central business district (Connaught Place and adjoining area) the average rent is $3-4 per square feet a month.

Vestian noted that several multinational corporations have set up their offices in India to effectively manage and execute real-time tasks across the globe from their Indian base.

'This preference is chiefly driven by substantial cost advantage associated with operating from India, as the cost of occupancy and overall operational expenses in India are notably lower in comparison to many other countries,' the consultant said.

The availability of high-quality talent pool at an affordable rate is also an important factor for MNCs to set up offices in India, it added.

'Indian professionals have consistently demonstrated high efficiency, surpassing their counterparts in various parts of the world,' Vestian said.

An additional financial advantage lies in currency exchange rates as it reduces the operational cost significantly, the consultant highlighted.