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Bengaluru CBD Ranked Fifth In Asia In Terms Of Growth

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Bengaluru CBD Ranked Fifth In Asia In Terms Of Growth

Bengaluru CBD is the 5th fastest growing Asian market with a 9.4 percent rise in rents

Bengaluru commercial property market is the 5th fastest growing market in Asia. The lease rentals witnessed over 9.4 percent rise in the second quarter of 2019. The Knight Frank Prime Office Rental Index indicates that Mumbai’s Bandra-Kurla Complex (BKC) and New Delhi’s Connaught Palace ranked 8th and 12th at the end of the quarter. Due to the influx of new supply in the first half of 2019, Indian office rents remained stable in Q2. 23 million sq. ft. which signals a 31 percent year-on-year growth was supplied during the period. 

The index that keeps a record of the rental levels of 20 frontline cities across the Asia-Pacific region revealed that the IT/ITes sectors take up the lion’s share of new space contributing 35 percent of all transacted volumes in the first half of 2019. Though the corporate spending moved towards insourcing, strong demand from co-working operators counterbalanced this weakness. 

Co-working transaction volumes rose 42 percent year-on-year to 4 million sq. ft. in the first half of 2019. Shishir Baijal, Chairman and Managing Director, Knight Frank India, said that the office markets of India have withstood headwinds from global and national economic conditions and depict an impressive growth story. He also added that the leasing volumes have grown consistently and are at historic highs which shows a high level of confidence and faith that the corporate world has in the India story. 

When we consider y-o-y growth at the end of the quarter, Central Business District (CBD) of Bengaluru including MG Road, Residency Road, Cunningham Road, Lavelle Road, Richmond Road and Infantry Road ranked 5th. 

Among international cities, Melbourne saw the highest on-year rental growth at 16 percent. Tokyo with 12 percent, Bangkok with 10.4 percent and Singapore with 10.3 percent were the other prime office markets that saw higher rental growth rates ahead of Bengaluru. Bengaluru CBD saw the highest annual growth in rental values in India, with current rentals at Rs 125 per sq. ft. per month. Mumbai’s BKC registered a growth of 5 percent in the quarter and was recorded at Rs 300 per sq ft a month. New Delhi’s Connaught Place recorded a rental value of Rs 330 sq. ft. a month also recorded an annual rise of 1.4 percent during the quarter.

Source: The Economic Times

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