Bengaluru topped the index at a 7% quarter-on-quarter increase.
- Tight supply pushed rents up as large corporates jostle for quality space within a finite market
- Mumbai market witnessed stable rentals
Knight Frank, the independent global property consultancy, today launched its Asia-Pacific Prime Office Rental Index for Q2 2018. The index increased by 2.4% quarter-on-quarter in Q2 – almost three times that of Q1 at 0.9% – primarily driven by rent increases seen in Bengaluru, Tokyo, Hong Kong and Sydney.
Key Asia Pacific findings:
- The index rise was primarily driven by rent increases seen in Tokyo, Bengaluru, Hong Kong and Sydney.
- Rents are expected to remain steady or see marginal increases for the rest of 2018.
- Kuala Lumpur’s office market saw the steepest decline, with a 0.8% decrease quarter-on-quarter amidst political uncertainty and supply concerns.
Key India findings:
- Bengaluru topped the index at a 7% quarter-on-quarter increase. Tight supply pushed rents up as large corporates jostle for quality space within a finite market.
- Though rentals in Bengaluru’s CBD had stagnated in the previous two quarters, heightened occupier demand from co-working and IT/ITeS segments caused many developers to charge a premium for available spaces.
- CBD also garnered the second highest share of Bengaluru’s transaction volume in first half of 2018 and remains popular with a diverse occupier base
- For the other markets in India viz Mumbai and Delhi NCR, rental growth was generally flat thisquarter
- Mumbai market witnessed stable rentals although the outlook in terms of rental growth remains positive
Speaking on the report findings, Arvind Nandan, Executive Director – Research, Knight Frank India, said “Shortage of quality spaces has led to a 7% quarter-on-quarter rental growth in Bengaluru’s Central Business District (CBD) in Q2 2018. Corporate occupiers are jostling forquality space within the tightly suppliedCBD and off-CBD districts, with many of them navigating the issue by pre-committing to upcoming supply. Similarly, in Mumbai where the rentals have remained unmoved this quarter, limited supply is likely to lead to rental growths in the ensuing period.”