Delhi-NCR is the 6th most expensive office space rental market across the APAC region cited Knight Frank. Hong Kong SAR continues to be APAC’s most expensive office market during the quarter.
Prime rents in the NCR remained stable in Q3 2024, while Mumbai and Bengaluru saw year-over-year (YoY) increases of 5% and 3%, respectively, driven by strong occupier demand and limited new supply. In Q2 and Q3 2024, combined transaction volumes across these three markets hit consecutive all-time highs. This growth is largely attributed to two key sectors: Global Capability Centres (GCCs) and India-focused businesses. The surge reflects optimism about India’s economic future, its rich talent pool, business-friendly regulations, and the ongoing growth of its vast consumer markets.
In Q3 2024, Bengaluru saw the largest volume growth, up 158% YoY. Bengaluru's standing as a GCC hub was further supported by the fact that 62% of the space traded in the city was from GCCs. The majority of Mumbai and NCR's business volume was made up of companies that dealt with India.
Prime office rentals in Delhi-NCR, Mumbai, and Bengaluru remained robust year-on-year, and rental rates are expected to stay stable over the next 12 months. Overall, 16 out of the 23 monitored cities reported stable or increasing rents year-on-year, up from 15 in Q2 2024.
Notably, Brisbane recorded the highest year-on-year growth in Q3 2024, reflecting a positive trend across many markets. The stabilising vacancy rates across the region have declined marginally by 0.2 percentage points.
The prime office market of Delhi-NCR continues to see rental values maintain levels seen in the past four quarters. The prime office rent of the city was recorded at INR 340/sqft/month, making it the 6th most expensive office market in the APAC region.
The prime office rent of the city was recorded at INR 317/sqft/month and was the 8th most expensive commercial market in the APAC region.
Bengaluru stands 18th on the list and is one of the least expensive prime office markets in the APAC region. The prime office rent of the city was recorded at INR 138/sqft/month. The rental value in the city is projected to remain steady during the following 12 months.
The Asia-Pacific prime office sector is poised to remain tenant-favourable in 2024. With an ample supply pipeline, landlords have had to adopt accommodative strategies to sustain occupancy levels. Following the delivery of over 12 million sqm of office space in 2024, the supply pipeline for 2025 is expected to decrease by about one-fifth. While availabilities in the region are anticipated to decline, this will occur gradually. However, an increase in leasing activity could quickly tighten the availability of prime spaces, reinforcing the ongoing trend of flight-to-quality as tenants seek to secure premium locations that meet their evolving workspace needs.
