Delhi-NCR Is the Most Expensive Prime Office Market In India: Report

The annual prime headline rent of commercial office space in the city was recorded at $51.6/sqft/year by property consultancy Knight Frank's APAC Office Rental Index Q2 2022

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Property consultancy Knight Frank, in its recent edition of the Asia-Pacific Prime Office Rental Index for Q2 2022, has noted Delhi-NCR as the 10th most expensive commercial real estate market in the APAC region.

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The annual prime headline rent of commercial office space in the city was recorded at $51.6/sqft/year. Hong Kong SAR continued to be Asia's most expensive office market with an annual rentof $175.4/sqft/year.

In terms of annual growth, Bengaluru witnessed the highest prime office rental percentage increase of 12.1 per cent YoY in Q2 2022. Mumbai achieved the highest quarterly change at 7 per cent in its prime officerental value.

"As the economy stabilises post pandemic, there is a rise in new hiring across most industries along with a move towards return to office which is propelling demand for offices in India. The Indian office market witnessed strong leasing trend that continued into Q2 2022 with Bengaluru leading in transaction volumes. With its unique position, India can expect its key driving sectors such as IT/ ITeS to continue to grow despite global headwinds," said Shishir Baijal, chairman and managing director, Knight Frank India.

Key highlights of the performance of key Indian cities:

Bengaluru

With an increase of 12.1 per cent YoY, Bengaluru was the best-performing prime officemarket in the APAC region in terms of rental growth in Q2 2022 as compared to the last year. The rental value in the city is projected to rise during the following 12 months. With the 22nd position on APAC Prime Office Rental Index, the city finds itself as one of the least expensive prime office markets in APAC region.The prime office rent of the city was recorded at INR 1,620/sqft/year.

Mumbai

The prime office rent of the city was recorded at INR 3,622/sqft/year and wasthe 11th most expensive commercial market in the APAC region. The prime office market of the citygrew 7 per cent YoY after three quarters of stagnation. The rental value is expected to increase over the next 12 months.

Delhi-NCR

The prime office market of Delhi-NCR continues to see rental values maintain levels seen in the past four quarters. However, the rental value is expected to increase over the next 12 months as transaction volumes are expected to pick up going forward. The prime office rent of the city was recorded at INR 4,078/sqft/year.