New Delhi, June 08, 2019: Knight Frank, an independent global property consultancy, has launched its Asia–Pacific Prime Office Rental Index for Q1 2019 – that tracks prime office rental movement across key markets of Asia. The index recorded a decline of 0.4% quarter-on-quarter in Q1 2019, though it remains up 6.2% year-on-year basis. Index decline was attributed to continued heightened global uncertainties led by US-China trade tension re-escalation, Brexit and various major elections across the region.
However, bucking the trend and despite the recently concluded elections, Indian cities like Bengaluru, Mumbai and the National Capital Region (NCR) see a promising growth with a stable to increase in Prime Office Rental forecast. Indian office rents grew in Q1 with Bengaluru and Mumbai rising 17% and 5% year-on-year (YoY) respectively following a strong 2018 performance stemming from chronic undersupply in both markets, solid demand from IT/ITeS tenants in Bengaluru and new space take-up by occupiers in Mumbai, Delhi saw a 1.4% (YoY) rise in rents in the prime office market.
KEY FINDINGS
INDIA PRIME OFFICE RENTAL
City | Submarket | Q1 2018 | Q4 2018 | Q1 2019 | % change (Q–o–Q) |
% change (y–o–y) |
Rental Values (INR / Sq.ft / Month) | ||||||
Bengaluru | CBD | 107 | 125 | 125 | 0% | 17% |
Mumbai | BKC | 286 | 300 | 300 | 0% | 5% |
New Delhi | Connaught Place | 326 | 326 | 330 | 1.4% | 1.4% |
“The office space demand witnessed record growth in 2018 with over 47 million square feet (msf) of leasing, while new office space supply rose by 13% in the same period. Prime office markets are already operating with very low vacancy which is slowing down new transactions. Strong demand trends have put upwards pressure on rentals, especially in prime markets, a trend that is expected to continue,“ said Shishir Baijal, Chairman & Managing Director, Knight Frank India.
ASIA–PACIFIC PRIME OFFICE RENTS
City | Submarket(s) | 12 months % change (Q1 2018 –Q1 2019) | 3-month %change (Q4 2018 – Q1 2019) | Forecast next 12 months |
Brisbane | CBD | 2.9% | 0.3% | Increase |
Melbourne | CBD | 17.1% | 2.8% | Increase |
Perth | CBD | 0.7% | 0.0% | Increase |
Sydney | CBD | 8.3% | 1.1% | Increase |
Tokyo* | Central 5 Wards | 10.6% | -1.9% | Same |
Beijing | Various | -1.1% | -1.4% | Decrease |
Guangzhou | CBD | 2.5% | 0.0% | Same |
Shanghai | Puxi, Pudong | -1.0% | -2.1% | Decrease |
Hong Kong | Central | 3.2% | -1.6% | Decrease |
Taipei | Downtown | 1.8% | 1.0% | Increase |
Seoul | CBD, GBD, YBD | -0.2% | 0.2% | Same |
Bengaluru | CBD | 17.0% | 0.0% | Increase |
Mumbai | BKC | 5.0% | 0.1% | Increase |
NCR | Connaught Place | 1.4% | 1.4% | Same |
Phnom Penh | City Centre | 0.6% | 0.5% | Same |
Jakarta | CBD | -16.0% | 0.0% | Same |
Kuala Lumpur | City Centre | -1.4% | -0.3% | Decrease |
Singapore | Raffles Place, Marina Bay | 23.7% | 1.5% | Increase |
Bangkok | CBD | 11.6% | 6.1% | Increase |
Manila | Various | 9.4% | 3.5% | Decrease |
Source: Knight Frank Research / *Sanko Estate
The Report also highlights that 9 Asia Pacific markets are set to witness an increase in prime office rental while 6 markets are likely to stay stable.
Corporate Comm India(CCI Newswire)
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