MNCs looking to set up a base of operations in India would do well to
look at Chennai, as the city has the lowest office rental rates among
any of the big 4 metros in India. But the city also witnessed faster
appreciation in rental values during the year ended December 2012
vis-a-vis more expensive cities like Delhi and Mumbai, as per real
estate consultant Jones Lang Lasalle’s latest “The Office Index” report.
In terms of the capital value of property as well, Chennai was ranked
lower than the other three big metros, making outright purchase of an
office space a more feasible prospect.
According to the report, expansion by MNCs remained slow in India and
China during the fourth quarter of 2012. The office market in general
was in favour of landlords, but corporate occupiers have become
increasingly reluctant to pay high rents.
Consequently, rental growth is likely to be limited in most markets. But
capital values are expected to increase faster than rent in many
markets, supported by solid investor interest.
