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Bengaluru Tops The Knight Frank Asia-Pacific Prime Office Rental Index Q2 2018

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Bengaluru Tops Knight Frank Asia-Pacific Prime Office Rental Index
  • Tight supply pushed rents up as large corporates jostle for quality space within a finite market
  • Mumbai market witnessed stable rentals

India, September 4, 2018: 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 the 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 this quarter
  • 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.”

 

ALSO READ: Knight Frank India Appoints Arvind Nandan As Executive Director – Research

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