Knight Frank, leading international property consultancy, in its latest report Asia-Pacific Prime Office Rental Index Q3 2021 forecasts the country's top office markets - Bengaluru, NCR and Mumbai are expected to remain stable in rental values over the next 12-months. The growth in rentals in Q3 has been largely flat.
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 across Asia-Pacific. Knight Frank forecasts that the decelerations in decline of rents in the APAC region to continue till the end of the year.
Central Business District (CBD) of Bengaluru, comprising areas such as MG Road, Infantry Road, and Residency Road, in Q3 2021 registered no change in rentals when compared on QoQ against a decline of 3.0% in Q2 2021. Office rents in Connaught Place in National Capital Region (NCR) and BKC region of Mumbai saw a flat 0.0% QoQ price change in Q3 2021 compared to NCR's -1.0% and Mumbai's -1.9% during Q2 2021.
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 23 cities tracked by the index, 14 recorded either stable or increased rents in the past quarter compared to 9 of the 20 cities compared in the previous quarter.
For Q1 2021, Knight Frank's Asia Pacific Prime Office Rental Index fell 0.3% 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% respectively. On an annual basis, the overall index was down -3.1% year-on-year.
Shishir Baijal, Chairman and Managing Director of Knight Frank India said, "India has achieved the milestone of 100 crore vaccination, the country is steadily moving back toward a more normalised work environment. Many corporates including those from the Technology sector have started a 'Return to Office' and are looking to sign office leases now. The work-from-home model will continue to exist; however the hybrid work solutions will emerge as a more preferred option. 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."