Prime office rents in Delhi-NCR, Mumbai, and Bengaluru remained stable during the July-September period this year. While prices in Mumbai and Bengaluru grew year-over-year by 5% and 3%, respectively, this stability is backed by high demand and a shortage of new supply, as reported by Knight Frank.
Yearly Growth and Market Position
Prime office rents across these three major cities have shown consistent growth compared to last year. Delhi-NCR is currently ranked as the sixth most expensive office rental market in the Asia-Pacific region. According to the report, rental rates in these cities are expected to remain stable over the next 12 months.
Strong Transaction Volumes
During Q2 and Q3 2024, the combined volume of office transactions in Delhi-NCR, Mumbai, and Bengaluru reached all-time highs. This increase is mainly due to the growth of global capability centres (GCCs) and India-focused companies, highlighting confidence in India’s business environment.
Economic Optimism Drives Demand
The report noted that optimism about India’s future economy, a large talent pool, favorable regulations, and expanding consumer markets are driving this trend. Shishir Baijal, Chairman and Managing Director of Knight Frank India, commented that strong global interest in India’s office market reflects the stability of the country’s economy.
“The sustained demand in India’s major office markets shows the resilience of the Indian economy,” said Baijal. He pointed out that steady rent levels since 2022, consistent occupancy, and increasing demand in 2024 support confidence in the market’s future strength.
Bengaluru Leads with Significant Growth
In Q3 2024, Bengaluru experienced the highest growth in transaction volumes, with an on-year increase of 158%. GCCs played a major role in this, making up 62% of the office space transactions in the city. Meanwhile, Mumbai and Delhi-NCR primarily saw activity from local India-focused companies.
Current Rent Prices
As of now, Mumbai’s prime office rent is Rs 317 per square foot per month. Bengaluru’s rate stands at Rs 138 per square foot per month, and Delhi-NCR has the highest at Rs 340 per square foot per month.
This steady performance points to the continued strength of India’s prime office market, indicating stability for businesses looking for office spaces in these cities over the next year.
