MUMBAI: Bengaluru commercial property market has emerged as the 5th fastest growing market in Asia with lease rentals witnessing over 9.4% rise in the second quarter of 2019.
Mumbai’s Bandra-Kurla Complex (BKC) and New Delhi’s Connaught Place were ranked 8th and 12th at the end of the quarter, showed the Knight Frank Prime Office Rental Index.
Indian office rents remained stable in Q2 as the market saw an influx of new supply in the first half of 2019; 23 million sq ft, a 31% year-on-year growth, was supplied during the period.
The IT/ITeS sectors continue to absorb the lion’s share of new space coming online, accounting for 35% of all transacted volumes in the first half of 2019, showed the index that tracks rental levels of 20 frontline cities across the Asia-pacific region.
It has started to show signs of indicating lower corporate spending and moves towards insourcing. However, this weakness has been offset by strong demand from co-working operators; co-working transaction volumes rose 42% year-on-year to 4 million sq ft in the first half of 2019.
Shishir Baijal, Chairman & 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. The leasing volumes have grown consistently and are at historic highs, which indicate a high level of confidence that the corporate world has in the India story, especially from a long-term perspective.
Central Business District (CBD) of Bengaluru including MG Road, Residency Road, Cunningham Road, Lavelle Road, Richmond Road and Infantry Road ranked 5th in terms of y-o-y growth at the end of the quarter.
Among international cities, Melbourne saw the highest on-year rental growth at 16%. Tokyo with 12%, Bangkok with 10.4% and Singapore with 10.3% 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 growth of 5% 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% during the quarter.
Source: ET Realty
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