Office rentals remained stable across the major markets in India in Q2 2021.
The country’s top office markets— Bengaluru, National Capital Region (NCR) and Mumbai— are expected to remain stable in rental values over the next 12-months, international property consultancy Knight Frank has said.
The rents during the third quarter of the calendar year 2021 largely remained flat, Knight Frank’s Asia-Pacific Prime Office Rental Index Q3 2021 report said.
With India achieving the milestone of 100 crore vaccination, the country was moving towards a more normalised work environment, said Shishir Baijal, Chairman and Managing Director of Knight Frank India.
“Many corporate, including those from the technology sector, have started a “return to office” and are looking to sign office leases now,” said Shishir Baijal, Chairman and Managing Director of Knight Frank India.
In the third quarter, Bengaluru’s Central Business District, which includes areas such as MG Road, Infantry Road and Residency Road, saw no change in rentals sequentially. Rents had dropped 3 percent in the second quarter.
Office rents in Delhi’s Connaught Place in NCR and BKC region of Mumbai remained unchanged sequentially in the September quarter. NCR saw a dip of a percent and Mumbai’s 1.9 percent during the June quarter, the report said.
Even though curbs had eased, the work-from-home model would continue, however, hybrid work would emerge as a more preferred option, Baijal said.
“The demand for office space is expected to grow due to the pent-up demand and the hiring of new staff that has taken place in the last 12-18 months,” he said.
The decelerations in decline in rents in the APAC region would continue till the end of the year, Knight Frank has said.
According to the report, Taiwanese capital Taipei is the only city expected to see office rental values rise in the APAC region over the next 12 months.
Of the 23 cities tracked by the index, 14 recorded either stable or increased rents in the past quarter compared to nine of the 20 cities compared in the previous quarter.
For Q1 2021, the rental index fell 0.3 percent quarter-on-quarter, with large office markets such as Auckland, Jakarta and Tokyo recording a QoQ rental decline of 4.5, 2.7 and 1.2 percent, respectively.
On an annual basis, the overall index was down 3.1 percent year-on-year.
The Asia-Pacific Prime Office Rental Index aims to provide occupiers, landlords and investors with a regular analysis of the rental performance of prime office markets in the region.