India’s prime office rentals are expected to remain stable over next 12-months, said Knight Frank
Office rentals in Bengaluru, Mumbai and NCR are expected to remain stable over the next 12 months despite the uncertainty on account of the second wave of the pandemic, property consultancy Knight Frank said.
Office rents in Bandra Kurla Complex (BKC) in Mumbai recovered with a marginal decline of 0.8 percent QoQ in the March quarter compared with -5.5 percent in the previous three months, Knight Frank said in the report titled Asia-Pacific Prime Office Rental Index Q1 2021.
It attributed the robust recovery to improved transaction activity in the Q1 2021. Knight Frank forecasts that the decline in rents to decelerate this year, with overall rents expected to fall 3 percent in the APAC region, compared with the 4.8 percent decline in 2020.
Central Business District (CBD) of Bengaluru, comprising areas such as MG Road, Infantry Road, and Residency Road, has registered a decline of 3.0 percent QoQ in Q1 2021 against a decline of 4.0 percent in Q4 2020. In Connaught Place in the National Capital Region (NCR), office rents were flat in Q1 2021 compared to -1.0 percent in Q4 2020.
According to the index, Taipei is the only city expected to witness an increase in office rental values across the APAC region in next 12-months. Of the 22 cities tracked by the index, 8 recorded either stable or increased rents in the past quarter compared to 10 in the previous quarter.
For Q1 2021, Knight Frank’s Asia Pacific Prime Office Rental Index fell -1.2 percent quarter-on-quarter, led by large office markets such as Tokyo, Hong Kong, and Bengaluru which recorded rental decline between 3.0 percent to 2.8 percent over the same period. On an annual basis, the overall index was down 5.5 percent year-on-year.
“The second wave of pandemic and associated regional lockdowns have temporarily delayed occupiers’ office re-occupancy plans. However, control on infection case count with graded regional lockdowns and progress on vaccination drive will act as a market stabiliser in near future. Given the strong fundamentals of the India office market, despite the near-term uncertainty, occupiers will positively react to any improvement in the pandemic scenario in the country,” said Shishir Baijal, Chairman and Managing Director of Knight Frank India.