Prime Office Rents Remain Steady in Delhi-NCR, Mumbai, Bangalore in Q2 2024

Prime Office Rents Remain Steady in Delhi-NCR, Mumbai, Bangalore in Q2 2024

Delhi-NCR, Mumbai, Bangalore, July 30, 2024, – Prime office rental rates in India's key markets, according to the latest Asia-Pacific Rental Index by Knight Frank.

Despite global economic uncertainties, the office space markets in these cities have shown remarkable resilience. Delhi-NCR ranked as the fifth most expensive office market in the APAC region, maintained a prime office rent of Rs 340/sqft/month. Mumbai followed closely, securing the eighth position with prime office rents at Rs 302/sqft/month. Bangalore, known for its affordability, recorded a prime office rent of Rs 137/sqft/month, ranking 18th in the APAC region.

Significant Transaction Activity

Transaction activities in these markets have seen a notable 50% increase in Q2 2024, reflecting robust occupier sentiment. The majority of these transactions were driven by India-facing businesses, highlighting the strategic interest in India's consumer markets and skilled labor pool. Bangalore led the leasing activities, with 4.9 million square feet leased during the quarter.

Stable Rental Rates

The rental rates in these prime markets have remained stable year-over-year, with current market momentum suggesting continued stability for the rest of 2024. This stability is attributed to strong socio-economic and political conditions, as well as a positive growth trajectory.

Insights from Industry Leaders

Shishir Baijal, Chairman and Managing Director of Knight Frank India, emphasized the surge in global corporate interest in India’s office space market. "India’s status as one of the fastest-growing large economies has led to record-high transaction volumes in the first half of 2024, with a 33% year-over-year rise driven by Indian businesses and GCCs. We anticipate commercial office space hitting record highs," Baijal stated.

Outlook

The current business environment, influenced by downsizing in sectors like finance and technology, may keep demand for office spaces restrained. However, companies are encouraged to explore quality options and secure favorable rates amid the ample supply pipeline and high interest rates affecting future construction.
Conclusion

The steady prime office rents in Delhi-NCR, Mumbai, and Bangalore underscore the resilience and strategic importance of these markets. As global interest continues to grow, these cities are well-positioned to maintain their status as key commercial hubs in the APAC region.

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