Mumbai’s Bandra Kurla Complex was the 5th most costly office conclave in terms of the gross effective rents it commands, jumping two places from Q4 2016.
Commanding gross effective rentals of USD 88.8 per sq meter per month, Connaught Place in New Delhi has emerged as the third most expensive office district among global peers across 20 international cities. Mumbai’s Bandra Kurla Complex (BKC) was the fifth most expensive on the index which was topped by Central, the prime office pocket in Hong Kong (USD 212 per sq. m per month).
BKC commands gross effective rentals of USD 80.1 sq. m per month and improved its position by two places over the fourth quarter of 2016, says Knight Frank Asia-Pacific Prime Office Rental Index Q4 2017.
In terms of rental appreciation, Bengaluru’s Central Business District (CBD) recorded the third highest growth with year-on-year increase of 5.40 per cent in the 12 months to Q4 2017. While Connaught Place (5%) ranked fifth by this measure, BKC (4%) stood on 10th spot, the report said.
Projections for the subsequent 12-month period indicate that rents would further grow at BKC and Bengaluru, but it is expected to plateau at Connaught Place.
Overall the index recorded 1.1 per cent year-on-year growth in the last quarter of 2017 propelled by solid economic performances across the Asia Pacific region. This was primarily driven by rising rents in 12 of the markets over the quarter.
Rentals across at least 16 of the 20 markets tracked are either set to appreciate or remain stable, the report suggests. Demand in co-working and technology-related spaces are expected to play a major part in pushing rents higher.
“Rental growth continues to be strong across prime office markets in India on account of an ongoing supply crunch in the country. This, coupled with strong occupier demand is expected to drive the rentals up in the next 12 months in the prime office markets of Mumbai and Bengaluru; however, we expect rental growth to remain stable in Connaught Place,” said Samantak Das, Chief Economist and National Director-Research, Knight Frank India.