B'galuru 5th fastest growing office rentals in Asia-Pacific

The CBD (central business district) of Bengaluru was ranked fifth in Asia-Pacific in terms of year-on-year office rental growth at the end of second quarter of 2019, according to a report of property consultant Knight Frank.

Melbourne saw the highest rental growth y-o-y at 16 per cent followed by Tokyo (12 per cent), Bangkok (10.4) and Singapore (10.3) ahead of Bengaluru (9.4), said the prime office rental index in Q2 2019.

The CBD of Bengaluru comprises MG Road, Residency Road, Cunningham Road, Lavelle Road, Richmond Road and Infantry Road.

Bandra Kurla Complex (BKC) and Connaught Palace make up the prime office markets in Mumbai and the NCR respectively. They were ranked 8th and 12th at the end of Q2 2019.

The Knight Frank prime office rental index tracks rental levels of 20 frontline cities across the Asia-Pacific region.

Bengaluru CBD saw the highest annual growth in rental values in India, with current rentals at Rs 125 per square foot per month registering an annual growth of 9.4 per cent.

Mumbai's BKC registered growth of five per cent and was recorded at Rs 300 sq ft per month.

New Delhis Connaught Place recorded a rental value of Rs 330/sq ft per month, an annual rise of 1.4 per cent.

Indian office rents remained stable in Q2 as the market saw an influx of new supply in H1 2019; 23 million square feet (msf), a 31 per cent year-on-year growth, was supplied during the period.

The IT/ITeS sectors continue to absorb the lions share of new space coming online, accounting for 35 per cent of all transacted volumes in H1 2019 but has started to show signs of slowing on 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 msf in H1 2019, it was stated.