Four other Indian cities -- Chennai, Pune, Bangalore and Kolkata –-- figure in the DTZ's list of top 10 least expensive office space markets in the world. (Agencies)
"Devaluation of the Indian rupee in combination with declining rents led to Hyderabad overtaking Surabaya (Indonesia) as the least expensive market in 2013," DTZ said in a report.
The consultant has released the 17th edition of the Global Occupancy Costs – Offices, which presents outlook and analysis of the costs of occupying prime office space across 138 markets worldwide.
Chennai retains its position as the world’s third least expensive office space market. Pune and Bangalore occupy fourth and fifth position respectively.
"At occupancy costs below USD 3,000 per workstation per year in 2013, our list of the ten least expensive markets consists solely of tier II markets in India and China," DTZ said.
The total cost of occupancy in Hyderabad stood at USD 1,250 per workstation per annum.
When contacted, DTZ India Research Head Rohit Kumar said: "Hyderabad has been stricken by political instability and hence it has suffered lack of office demand leading to drop in rentals".
Office rentals have declined in Hyderabad to Rs 45 per sq ft per month in 2013 from Rs 58 per sq ft a month in 2012, he added.
"Indian tier II markets will continue to offer occupiers the world’s most affordable office space," DTZ said.
Total occupancy cost is defined as the average cost of leasing prime net usable space. Occupancy costs include rents and outgoings, which refer to costs charged by the landlord in a multi-tenant building like service charge and property tax.
Meanwhile, the report also revealed that London West End and Hong Kong are the most expensive occupier markets in our global list, with occupancy costs exceeding USD 20,000 per annum on a workstation basis.
The difference in costs between London and Hong Kong increased from 13 percent in 2012 to 22 per cent in 2013. This reflects rising demand in London, and on the other hand, continued consolidation and decentralization in Hong Kong.
"Mumbai and Delhi are placed at 63rd and 49th position globally. This makes Delhi the costliest office space in India followed by Mumbai," DTZ said.
Four other Indian cities -- Chennai, Pune, Bangalore and Kolkata –-- figure in the DTZ's list of top 10 least expensive office space markets in the world.