Connaught Place in Delhi slipped four notches to become the world's eighth most expensive office location as rentals remained stable and rupee weakened in 2013, said property consultant Cushman & Wakefield (C&W).
Connaught Place, located in central Delhi, was 4th in last the year's ranking.
"New Delhi's Connaught Place fell four notches to settle as eighth most expensive location in the world," C&W said in a report that ranks locations across Americas, Europe, Asia- Pacific, Middle East & Africa.
London's West End emerged as the world's most expensive office market, retaining its position ahead of Hong Kong which is ranked second.
Of the top ten markets, only London and New York have seen a rise in rental values, while most other top ten markets recorded a slowdown in rental values over the previous year.
Moscow and New Delhi recorded no change in rental values.
"Despite a stronger performance against most of the top markets, Connaught Place fell from fourth position to eighth due to an appreciation in both the US dollar and euro against the Indian rupee in 2013; this caused a shift in New Delhi's position in terms of global occupancy costs when measured on a dollar or euro basis," the consultant said.
Connaught Place has witnessed stable rentals at Rs 414 per sq ft per month.
C&W noted that rentals in Connaught Place remained stable because of limited activities in the location.
It forecast rentals to continue to at similar level as the market could have reached its peak levels rental. The location continues to remain high on priority for sectors like BFSI, consulting, trade, and media.
The consultant said that demand for office space in Connaught Place is robust considering its proximity to government organisations, trading centers and retail location.
Commenting on the report, C&W Executive Managing Director South Asia Sanjay Dutt said: "Weakening of the Indian rupee against the dollar/euro has office markets in India favorable for international occupiers, whilst domestic occupiers have not seen any significant change in rental values."
With limited supply of Grade A office space expected in the near future, he said the CP would continue to command high rentals.
"However, going forward, the supremacy of Connaught Place may be challenged with newer corporate offices locations in Gurgaon that may provide better alternatives to New Delhi CBD," Dutt added.
Mumbai's Bandra Kurla Complex (BKC) with rentals of Rs 285 per sq ft a month emerged as the second most expensive office location in India and 8th most expensive across APAC.
Kolkata CBD recorded the highest rental growth in India at 4.35 per cent in 2013 driven by the positive demand from sectors such as BFSI, services/consulting.