– India accounts for three of the world’s top ten locations for rental rises in 2006
– London is the world’s most expensive industrial location
– Rishon Le-Zion in Israel is in second place, followed by Tokyo
India goes up nine places to reach 14th position in the world’s most expensive industrial space report by global real estate consultancy Cushman & Wakefield. India also accounts for three of the top ten locations in terms of percentage rises 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.
Sanjay Verma, executive managing director of Cushman & Wakefield in South Asia, comments: “Manufacturing is undergoing a renaissance in India as export volumes rise rapidly, with the sector becoming increasingly attractive. Central government is continuing its commitment to legislative reforms and improving infrastructure, which in turn is backed by the availability of private capital, strong domestic demand and a large pool of skilled and unskilled labour.”
“In Mumbai and New Delhi, a shortage of space has pushed up rents and led to manufacturing and logistics activity shifting to industrial parks outside the main cities,” Verma elaborates. “Meanwhile, international manufacturers in such sectors as automobile, biotech, pharmaceutical and telecoms are particularly favouring setting up of operations in the economically flourishing states of Gujarat, Maharashtra, Andhra Pradesh and Tamil Nadu.”
Due to scarcity of office space availability in the city, industrial locations in Delhi such as Oklha Phase I, II & III and Mohan Cooperative Industrial Estate have been witnessing significant activity from ITES, software developments and call centre/BPO companies, which has led to the exceptional increase in rentals in these locations.
The area around London’s Heathrow airport retains its position as the world’s most expensive industrial location, according to the Cushman & Wakefield ‘Industrial Space Across the World’ report.
One square metre of prime industrial space at London Heathrow costs €252 per square metre per year to occupy. London is followed by the Me’ouyan Soreq district in Rishon Le-Zion in Israel in second place and Tokyo in third.
Industrial Space Across the World looks at 85 of the world’s top industrial locations. The main global ranking is compiled by taking the most expensive location in Euro terms in each of the 45 countries monitored.
In this year’s survey, 90 per cent of the locations showed rising or stable occupancy costs for industrial space in 2006, with only 10 per cent showing a fall. Globally, rents increased by an average 6.5 per cent in 2006 compared with 1.8 per cent in 2005.
Elaine Rossall, Cushman & Wakefield’s head of Business Space Research & Consultancy in Europe, the Middle East and Africa, says: “Many of the world’s top industrial locations are continuing to benefit from the globalisation of manufacturing and from the internationalisation of the main logistics networks. Occupancy costs are also being driven up in many locations because of competing pressures from other, more high-value land uses, in particular from residential and retail.”