The Indian capital is the fourth most expensive location in the Asia Pacific region, with occupancy of industrial space costing 88 euros per square metre per year. At a rental of 154 euros, Tokyo tops the list followed by Sydney, Hong Kong, New Delhi and Singapore.

“A robust performance by the Asia-Pacific markets led to rental growth of 13.4 per cent, largely due to the soaring demand in India and China,” says the report by real estate consultancy Cushman and Wakefield (C&W). The report titled ‘Industrial Space Across the World’ analyses prime industrial property rental performance and occupancy costs across the globe for 2006.

Compared to the rest of the world, Delhi has gone up nine places to reach 14th position in the world’s most expensive industrial space. India also accounts for three of the top ten locations in terms of percentage rise of rents in local currency terms, with prime industrial rents up 50 per cent in Mumbai, 33 per cent in New Delhi and 25 per cent in Bangalore.

Mumbai, at 50 per cent, has also seen the highest rental growth in Asia Pacific in 2006, while the Indian market as a whole averaged a 30 per cent growth in rentals. Comparing this to China, rents in Shanghai and Beijing grew by 20 per cent and 9 per cent respectively over the year.

The growth in Delhi is attributed not only to the rise in manufacturing and higher exports volumes, but also to industrial locations being used as office space. In Delhi, a scarcity of office space availability in the city has led to industrial locations such as Okhla Phase I, II & III and Mohan Cooperative Industrial Estate witnessing significant activity from ITeS, software developments and call centre/BPO companies like Wipro, Bharti, NIIT, Textbook and American Express. “This has led to the exceptional increase in rentals in these locations,” says the report.

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