Top Indian cities witness growth in Prime Office Rental; Connaught Place is the 4th most expensive office market in Asia Pacific: Knight Frank Survey

  • Bengaluru sees highest yearonyear growth in India
  • Mumbai and Delhi also witness upward swing

New Delhi, June 08, 2019: Knight Frank, an independent global property consultancy, has launched its AsiaPacific 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 MumbaiDelhi saw a 1.4% (YoY) rise in rents in the prime office market. 


  • Of the 20 Asian cities tracked by the index, 15 recorded either stable or increased rents; two less than the 17 reported in the previous quarter.
  • While prime office rents were mostly flat in Q1 with Bengaluru and Mumbai 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.
  • New Delhis Connaught Place recorded gross effective rents of USD 82.5 /sq.m/month which stacked up as the fourth most expensive office location in Asia Pacific behind Hong Kong, Tokyo and Singapore. Mumbai BKC with effective rents of USD 75.1 /sq.m/ month was the seventh most expensive office location
  • In terms of year-on-year growth, prime office rentals in Bengaluru and Mumbai grew positively by 17% and 6%, with gross effective rents in the markets standing at USD 31.2 and USD 75.1/sq.m/month
  • NCR Prime Office space denoted by Connaught Place saw a 1.4% quarter-on-quarter rise in rents. The office rental for the prime market currently stands at USD 82.5/sq.m/month, making it the 4th most expensive office market in Asia.
  • Prime office rental forecasted to increase in Bengaluru and MumbaiNCR set to maintain the current market tone


City Submarket Q1 2018 Q4 2018 Q1 2019 change
    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 (msfof leasing, while new office space supply rose by 13in the same periodPrime office markets are already operating with very low vacancy which is slowing down new transactionsStrong 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. 


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)