Office Prices touches Sky in Bharat Diamond Bourse, Lease prices most expensive in India

Process of Shifting:

According to trade circles, allotments of offices have been made within the BDB area to about 2475 firms. Of them, nearly 2000 may have shifted by now from the Opera House area to the Bharat Diamond Bourse. This implies that nearly 400-500 firms which are still operating from the Opera House area are yet to shift to the new market. In other words about 400-500 offices located in the Opera House area, are yet to come up for sale. On the other hand, there is at present, a dull in demand for office-space in the Opera House area. This can be seen from the fact that recently one transaction for office space in the Prasad Chambers has been put through just around Rs. 34,000 per sq. ft. It was hoped earlier that some jewellers who are still operating in the Dhanji Street Area in the city might prefer to move into offices being vacated in the Opera House area by diamond firms wanting to shift to the Diamond Bourse. This process has not yet materialized. Since it is difficult to get office space easily within the Bourse now certain diamond firms, have been acquiring office space in the new buildings surrounding the Bharat Diamond Bourse where it is possible to acquire office-space at much cheaper rates. Lot of assortment and corporate offices of diamond companies are opening in surrounding new buildings as they are newly built with world class facilities and infrastructure, lot better compare to BDB.

Outright Purchase:

Due to earlier created bubble and controlled supply from existing old owners and auctioned owned office owners, the prices per square feet rose very high in comparison to offices around BDB and in new buildings in BKC. Prices for office-space within the Bharat Diamond Bourse, have now gone up as high as Rs. 80,000 to 90,000 per sq. ft, whereas offices in Laxmi Tower and The Capital Building which are ready and in operation are for Rs 30,000 to Rs 40,000 per sq ft. The new building like OneBKC by Wadhwa is selling between Rs 25,000 sq ft to Rs 30,000 sq ft.

Leasing:

Due to such high purchase rate of all offices in Bharat Diamond Bourse(BDB), the rentals in last six months suddenly have skyrocketed and reached as high as Rs 800 to Rs 1,000 per square feet. This is more seen in office size below 400 sq ft. Whereas, office spaces in The Capital and Laxmi Tower are available for lease in Rs 250 to Rs 325 per sq ft. This means to lease an office of 150 square feet in BDB, one need to pay between Rs 1,20,000 to Rs 1,50,000 per month. Any individual or company who does not have income of Rs 8 to10 lakh a month, it is not feasible to be in the diamond bourse and hence diamond industry, resulting in small traders throwing out of the business.

World Comparison:

As per latest report of Cushman and Wakefield 2014 (Refer Table), Connaught Place in New Delhi comes in top 10 places being most expensive location for leasing. West End in London tops at US$ 271.61 / sq. ft / year which is Rs 1380 / sq. ft /month, whereas Connaught Place occupancy cost is USD 122.73 / sq. ft / year, which means approx Rs 625 / sq. ft / month.
Bharat Diamond Bourse(BDB) in Bandra Kurla Complex prices at Rs 800- 1000 / sq. ft / month, means makes it to most expensive in India, most expensive in compare to any diamond bourses in the world and making it to top three most expensive place to have office in the world.