Delhi-NCR and Mumbai are among the top ten markets in the Asia Pacific region (APAC region), driven by demand from Global Capability Centers (GCCs) and India-focused businesses, as noted in Knight Frank APAC Prime Office Rental Index.
Delhi-NCR has secured the sixth place in the most expensive office rental market in the entire APAC region, the latest edition of the Asia-Pacific Prime Office Rental Index for Q3 2024 shows.
The Hong Kong special administrative region (SAR) continues to be the most expensive office market in APAC for the quarter.
Prime rents in NCR remained stable in the third quarter (Q3) 2024, while Mumbai and Bengaluru saw year-on-year (YoY) increases of 5 percent and 3 percent, respectively, driven by strong occupier demand and limited new supply. .
In the second quarter (Q2) and (Q3) 2024, the combined transaction values in all three markets reached consecutive all-time highs. The report noted that this surge reflects optimism about the future of India’s economy, its talent pool, business-friendly regulations, and the continued growth of its large consumer markets.
In Q3 2024, Bengaluru saw the largest volume growth, up 158 percent YoY. Bengaluru’s position as a GCC destination was further supported by the fact that 62 percent of the marketable space in the city came from GCCs. Most of the Mumbai and NCR business is made up of companies dealing with India.
Leasing of prime offices in Delhi-NCR, Mumbai, and Bengaluru remained strong year-over-year, and rental rates are expected to remain stable over the next 12 months. Overall, 16 of the 23 cities monitored reported stable or rising rents year over year, up from 15 in Q2 2024.
Notably, Brisbane recorded the highest year-on-year growth in Q3 2024, reflecting a positive trend across many markets. The stability rate of vacancies across the region decreased slightly by 0.2 percent.
Shishir Baijal, Chairman and Managing Director, Knight Frank India, said, “India’s economic recovery continues to attract the interest of global companies, as evidenced by the continued demand in all major office markets in India. which is likely to exceed annual estimates by 2024, while rental rates remain stable. Strong rental levels from 2022, and growing demand in 2024, underline our confidence in the continued strength of the Indian office market in the near to medium term.”
The prime office market in Delhi-NCR continues to see rental rates maintaining the levels seen in the previous four quarters, the report said.
The city’s prime office rent was recorded at Rs 340/sqft/month, making it the 6th most expensive office market in the APAC region, as per the report.
The city’s prime office rental was recorded at Rs 317/sqft/month and was the 8th most expensive commercial market in the APAC region, the report said.
Bengaluru ranks 18th in the list and is one of the cheapest office markets in the APAC region. The office rent in the city was recorded at Rs 138/sqft/month. The Knight Frank report added that rents in the city are expected to remain stable over the next 12 months.
The Asia-Pacific office sector is poised to remain attractive to tenants in 2024, it added. After the delivery of more than 12 million square feet of office space by 2024, the supply pipeline for 2025 is expected to decrease by about one-fifth, according to the report.
