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Sunday, February 17, 2013

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Worlds Most Affordable Office Market: Chennai at 5th Position..!



Hyderabad city is the worlds 2nd most affordable office market after Surabaya in Indonesia, according to a survey, while Chennai and Pune are at 5th and 6th positions, reinforcing Indias reputation as among the cheapest destinations for foreign companies to set up operations.

Tier II cities in China & India continue to dominate the list of top 10 most affordable markets globally, said a survey by consultancy firm DTZ,  which measured occupancy costs per workstation in 126 business districts across 49 countries in 2012.

Mr. Rohit Kumar, Head, (Research) DTZ India said, ''2012 has seen office space absorption rates across Indian cities drop by a fifth. We expect the office space absorption to be stable in the current year, driven by signs of overall improvement in global and domestic economies. Rentals are also expected to appreciate across India."

Highlights of DTZ Report..!

** According to the survey, it costs companies between $ 2,620 (Nearly Rs. 1.41 lakh) and $ 9,810 (About Rs 5.27 lakh) per annum per employee in the top 6 Indian cities to set up operations, compared with $ 23,500 (about Rs. 12.63 lakh) per workstation in London West End.

* Chinas Chongqing and Nanjing, followed by Cancun in Mexico, also figure among the 10 most affordable markets.

* As per the report, a majority of markets in North Asia and India saw a 2 to 10 % rise in occupancy costs.  This has forced occupiers in many markets to increasingly consider secondary space, particularly where prime space is limited to cut cost.

** The total commercial office space absorption for the quarter ended December 2012 was 68 lakh million square feet,a decrease of 19 % compared with the previous year.

** Vacancies across cities are expected to rise in 2013, except Bangalore, a recent report by DTZ India said.

Companies continue to consolidate and relocate to less premium locations. Many companies are now looking to cut real estate costs, which comprises 22 to 27 % of the total operational expenditure, the second biggest component after human resource, said Mr.  Sridhar Raghavendra, founder of FM Zone India,a real estate and facility management firm.

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