# Tags
#Big Announcements #Big Story #Breaking News #Business #Commercial #Top News

India’s Prime Office Markets Steady Amidst Global Shifts: Knight Frank APAC Report

Delhi-NCR and Mumbai Secure Top Spots in APAC; Bengaluru Leads in Growth

In a resilient showing for the Indian office market, the latest Knight Frank Asia-Pacific Prime Office Rental Index (Q3 2024) places Delhi-NCR as the 6th and Mumbai as the 8th most expensive prime office rental markets in the Asia-Pacific (APAC) region. Bengaluru, often recognized for its tech-driven economy, outpaced all major Indian markets with a staggering 158% year-on-year (YoY) growth in transaction volumes during the quarter. # #OfficeSpaces

India’s Prime Rents Remain Stable

Despite global economic uncertainties, prime office rentals in Delhi-NCR, Mumbai, and Bengaluru remained stable or grew slightly. Mumbai and Bengaluru recorded YoY rental growth of 5% and 3%, respectively. The Delhi-NCR market maintained its position with rents at INR 340/sqft/month, while Mumbai followed at INR 317/sqft/month. Bengaluru, the least expensive among India’s top markets, recorded INR 138/sqft/month.

Shishir Baijal, Chairman and Managing Director of Knight Frank India, attributed this stability to strong corporate demand and steady physical occupancy rates. “Quarterly transaction volumes have reached record highs, and we expect annual benchmarks to be surpassed in 2024,” Baijal remarked, underscoring India’s economic resilience.

Global Capability Centres Drive Bengaluru’s Surge

Bengaluru witnessed the sharpest growth in transaction volumes, driven by Global Capability Centres (GCCs) occupying 62% of the traded space. The city’s tech-forward infrastructure and cost-effective offerings continue to make it a hub for multinational corporations.

A Broader Regional Perspective

Across APAC, 16 of the 23 tracked cities reported stable or increasing rents. Brisbane led with the highest YoY growth at 11.4%, followed by Perth (5.4%) and Mumbai (5.0%). Hong Kong SAR retained its title as the region’s most expensive market despite experiencing a YoY rental decline of 9.4%.

Vacancy Trends and Future Outlook

The APAC region saw a marginal decline in vacancy rates by 0.2 percentage points. According to Tim Armstrong, Global Head of Occupier Strategy and Solutions at Knight Frank, the region’s office market remains tenant-favorable. “Landlords are increasingly adopting flexible strategies to sustain occupancy levels, particularly as hybrid work models evolve,” he stated.

India’s Strong Economic Fundamentals

The report highlighted the ongoing demand from GCCs and India-focused enterprises, supported by the nation’s growing consumer base, talent pool, and business-friendly policies. The consistent rental stability since 2022 further demonstrates the robust health of India’s prime office market.

Key Numbers to Watch

Delhi-NCR: INR 340/sqft/month, 6th most expensive in APAC

Mumbai: INR 317/sqft/month, 8th most expensive in APAC

Bengaluru: INR 138/sqft/month, 18th in APAC

India’s YoY Rental Growth: Mumbai (5%), Bengaluru (3%), Delhi-NCR (0%)

Flight-to-Quality: A Dominant Trend

The report noted an increasing trend of tenants prioritizing premium locations and amenities, a phenomenon referred to as “flight-to-quality.” This reflects a broader shift in tenant preferences as companies focus on sustainability and hybrid work-friendly environments.

The Road Ahead

The APAC prime office market is expected to remain stable in 2024, with a reduction in new supply by 20% projected for 2025. In India, the sustained demand for quality office spaces combined with limited new supply suggests that the market is well-positioned for continued growth.

With its growing stature in the global economic landscape, India’s prime office markets are poised to remain a key destination for occupiers and investors alike.

Leave a comment

Your email address will not be published. Required fields are marked *