Delhi’s Connaught Place and Mumbai’s Bandra Kurla Complex (BKC) have figured as the third- and fifth-most expensive office districts among the top 20 Asia Pacific markets, as per Knight Frank Asia-Pacific Prime Office Rental Index for the fourth quarter (Q4) of 2017.
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The most expensive offices are leased out in Hong Kong and Tokyo. In terms of the gross effective rent office space commands, BKC has jumped up two places from Q4 2016. Connaught Place commanded gross effective rentals of $88.8 per sq.m. per month as compared to $212 per sq.m. per month at the prime office pocket in Hong Kong. The rate at BKC was $80.1 sq.m. per month.
In terms of rental appreciation, Bengaluru’s Central Business District (CBD) recorded the third-highest growth, with an year-on-year increase of 5.40% in the 12 months to Q4 2017. While Connaught Place (5%) ranked fifth by this measure, BKC (4%) stood 10th.
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What’s in store
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As per projections for the subsequent 12-month period, rental growth is expected in BKC and Bengaluru’s CBD, while Connaught Place rent will plateau.
“Overall, the index recorded 1.1% year-on-year growth in the last quarter of 2017 propelled by solid economic performances across the Asia Pacific region. This was primarily driven by rising rents in 12 of the markets over the quarter,” the report added.
Rentals across at least 16 of the 20 markets tracked are either set to appreciate or stay stable, the report said. Demand for co-working and technology-related spaces is expected to play a major part in pushing rents up.
“Rental growth continues to be strong across prime office markets in India on account of an ongoing supply crunch in the country. This, coupled with strong occupier demand, is expected to drive the rentals up in the next 12 months in the prime office markets of Mumbai and Bengaluru; however, we expect rental growth to remain stable in Connaught Place,” Dr. Samantak Das, Chief Economist and National Director-Research, Knight Frank India, said.