Delhi-NCR is the 10th most expensive commercial real estate market in the Asia-Pacific (APAC) region, Knight Frank’s prime office rental index for the April-June quarter showed.
The annual prime headline rent of commercial office space in the city was recorded at $51.6 (`4,078) per sq ft per year.
Hong Kong SAR continued to be Asia’s most expensive office market with an annual rent of $175.4 per sq ft per year.
In terms of annual growth, Bengaluru witnessed the highest prime office rental percentage increase of 12.1% on a year-on year basis in the second quarter of calendar year 2022. Mumbai achieved the highest quarterly change at 7% in its prime office rental value.
Of the 23 cities tracked by Knight Frank’s Asia-Pacific prime office rental index, 17 recorded stable or increasing rents in Q2 2022, compared with 21 in the previous quarter.
Shishir Baijal, chairman and MD, Knight Frank India, said: “As the economy stabilises post pandemic, there is a rise in new hiring across most industries along with a move towards return to office which is propelling demand for offices in India. The Indian office market witnessed strong leasing trend that continued into Q2 2022 with Bengaluru leading in transaction volumes. With its unique position, India can expect its key driving sectors such as IT/ ITeS to continue to grow despite global headwinds.”
In Mumbai, the prime office rent was recorded at `3,622 per sq ft per year and it was the 11th most expensive commercial market in the APAC region. The prime office market of the city grew 7% y-o-y after three quarters of stagnation. The rental value is expected to increase over the next 12 months.
At 22nd position on the APAC prime office rental index, Bengaluru finds itself as one of the least expensive prime office markets in the region. The prime office rent of the city was recorded at `1,620 per sq ft per year.
The prime office market of Delhi-NCR continues to see rental values maintain levels seen in the past four quarters. Going forward, transaction volumes are expected to pick up in the city. All three Indian cities are projected to see their rental value rise in the coming 12 months.