Bengaluru's central business district (CBD) has registered highest office rental growth in Asia Pacific region at 17.6 per cent during July-September quarter of 2019 compared with year-ago period on buoyant demand, according to global property consultant Knight Frank.
Connaught Place in the National Capital Region (NCR) and Bandra Kurla Complex (BKC) in Mumbai are ranked 7th and 11th in the 20 fastest growing prime office markets in the Asia-Pacific region, respectively.
"Office market in India continues to be robust despite sluggish economic growth," Knight Frank said in a report.
Bengaluru's CBD, comprising areas such as MG Road, Infantry Road and Residency Road, has registered the highest year-on-year (y-o-y) rental growth in the Asia-Pacific region at 17.6 per cent in July to September quarter this year (Q3 2019).
Bengaluru was followed by the CBDs of Melbourne and Bangkok on the 2nd and 3rd positions, with a y-o-y office rental growth of 15.5 per cent and 9.4 per cent, respectively.
Rentals have risen 4.4 per cent in Connaught Place and 2 per cent in BKC, Mumbai, as per the Knight Frank's Asia-Pacific Prime Office Rental Index Q3 2019.
"The office market has been witnessing a steady growth in India, which is adequately reflected in the growth in rental values in prime office markets. Bengaluru, in particular, has seen continued growth in leasing activities, due to the competitive pricing offered by its CBD, as against its counterparts in New Delhi and Mumbai," said Shishir Baijal, Chairman and Managing Director of Knight Frank India.
Bengaluru CBD sees continuous demand, which in turn has pushed the rental values upwards, he added.
"CBD in New Delhi continues to remain attractive, however, low vacancies and lack of Grade-A supply have restricted leasing volumes in this location. Mumbai CBD, on the other hand, continues to be one of the most favourable office destination commanding high rental values. We expect the trend to continue for these markets as the demand for office space is expected to continue, Baijal said.
Knight Frank's index, which tracks office rental of 20 main cities across the Asia-Pacific region, rose 0.1 per cent quarter-on-quarter to 157.3 in Q3 2019. Year-on- year, the index rose 1.8 per cent, decelerating from the 3.4 per cent rise witnessed in Q2 2019.
According to the report, Hong Kong, with a monthly rental value of USD 206.6 per sq metre, was the most expensive office market in Asia-Pacific in Q3 2019, followed by Tokyo (USD 110.9 per sq metre) and Singapore (USD 80.5 per sq metre).
The CBDs of NCR and Mumbai were ranked as the 5th and 7th most expensive prime office markets in Asia-Pacific, with monthly rental values of USD 51.8 per sq metre and USD 46.2 per sq metre, respectively. Bengaluru's CBD commands a rent of USD 20.5 per sq metre.