by THO
Delhi-NCR is the fifth most expensive office space rental market across the Asia Pacific region, according to a report released by property consultancy Knight Frank India on July 29. Overall, Hong Kong SAR continued to be APAC’s most expensive office market during the April-June quarter of 2024, per the report.
The prime office market in Delhi-NCR has sustained rental values consistently over the past six quarters, the report highlighted. With a prime office rent of ₹340 per sq ft per month, it ranks as the fifth most expensive office market in the APAC region, it noted.
The prime office rent of Mumbai was recorded at ₹302 per sq ft per month, ranking it as the eighth most expensive commercial market in the APAC region. Mumbai’s office leasing market demonstrated remarkable growth, with around 3 mn sq ft leased, marking a 183.1% year-on-year (YoY) increase, it showed.
Bengaluru ranked 18th is among the most affordable prime office markets in the APAC region. The prime office rent in the city was recorded at ₹137 per sq ft per month, with a marginal year-on-year increase of approximately 1.3%, the report showed.
The report highlighted that the IT capital retained its position as the leading destination among the three Indian cities, with 4.9 million square feet leased in Q2 2024. Companies actively encouraging employees to return to offices has positively impacted the transaction volumes in the market, the report noted.
Besides a 50% jump in transaction activities across the top three office markets in India – Delhi NCR, Mumbai and Bengaluru – prime office rental rates remained steady during the April-June period of 2024, according to the report.
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In India, the current market momentum points toward a stable rental in the rest of 2024 as well, the report said.
This is important amid the average 3.1% year-on-year decline in prime office rents across the Asia Pacific region during the second quarter of 2024, as per data cited in the report. Chinese mainland cities remain the primary factor behind this decline with rents there decreasing by 10.8% annually, the report reasoned.
Knight Frank counts prime offices as the most desired office spaces located in the central business district areas of a city.
“India’s office space market has seen a surge in global corporate interest, reflecting the country’s status as one of the fastest-growing large economies,” said Shishir Baijal, Chairman and Managing Director, Knight Frank India.
“Majority of transactions were driven by India-facing businesses reflecting a sustained strategic interest in India’s consumer markets and its skilled labour pool,” the report said.
Hong Kong SAR retains title of the most expensive commercial market across APAC
Overall, despite a drop of 8.8% in the April-June quarter, Hong Kong Special Administrative Region retained the title of the most expensive commercial market across the Asia pacific region with a prime office rental rate of $154.76 per sq ft per year, as per the report.
About 15 out of 23 cities tracked in the quarterly report recorded either stable or rising rental rates during the April-June period, resulting in a marginal improvement from the 3.2% drop observed during Q1 2024.
Speaking for the Asia Pacific region, Tim Armstrong, who is the global head of occupier strategy and solutions, said “The current trend reflects a business cycle downturn. Major office sectors such as finance and technology continue to downsize staff strength amid ongoing uncertainty in the business environment.”
“Lease renewals will remain popular, while companies may also consider consolidating their office spaces due to falling rents prompting a flight-to-quality move,” Armstrong added.
