Commercial rents in Bangalore for the October-December period (Q4) of 2022 showed an annual increase of 11%, helping the city stay on top among its peers in Asia Pacific (APAC), a recent report by property brokerage firm Knight Frank shows.
According to the report titled Asia-Pacific Prime Office Rental Index Q4 2022, India’s financial capital Mumbai followed the country’s Silicon Valley, where annual rents grew by 7%. In the APAC Prime Office Rental Growth report, the National Capital Region, where rent remained unchanged during the 3-month period, stood at the 13th spot.
However, prime rents in all the three cities remained stable on a quarterly basis. Prime rentals in all these cities are expected to increase over the next 12-months backed by healthy demand, the report said. The results are based on trends shown in Bangalore’s MG Road, Infantry Road, and Residency Road, Mumbai’s BKC and NCR’s Connaught Place.
Asia Pacific Prime Office Rents
| City | Annual Change
(YoY %) |
Quarterly Change
(QoQ %) |
Forecast next 12 months |
| Bengaluru | 11% | 0% | Increase |
| Mumbai | 7% | 0% | Increase |
| Auckland | 5.90% | 4.90% | Flat |
| Singapore | 5.50% | 1.70% | Increase |
| Bangkok | 5.50% | 3.30% | Decrease |
| Melbourne | 5.40% | 0.70% | Increase |
| Brisbane | 4.90% | 1.10% | Increase |
| Taipei | 4% | 0.50% | Increase |
| Seoul | 3.60% | 0.50% | Increase |
| Sydney | 3% | 0% | Increase |
| Perth | 2.40% | 0% | Increase |
| Phnom Penh | 1.80% | 0.40% | Flat |
| Delhi-NCR | 0% | 0% | Increase |
| Shanghai | 0% | -0.50% | Increase |
| Ho Chi Minh City | -0.20% | 0% | Decrease |
| Beijing | -0.90% | -0.30% | Flat |
| Kuala Lumpur | -1.40% | -0.50% | Decrease |
| Tokyo | -2.50% | 0.20% | Flat |
| Shenzhen | -2.50% | -1.00% | Decrease |
| Manila | -5.90% | 1.30% | Increase |
| Hong Kong SAR | -6.30% | -4.80% | Decrease |
| Guangzhou | -6.50% | -2.50% | Decrease |
| Jakarta | -6.50% | -13.30% | Flat |
Source: Knight Frank Research
According to the report, the index dropped by 1% quarter-on-quarter (QoQ), marking the second consecutive quarterly decline since Q2-2022. “This indicates that businesses across the region are tightening their capital expenditures in anticipation of potential market downturns,” said the report adding that despite the quarterly dips, the overall index is still up by 0.8% year-over-year at the end of Q4-2022.
Sixteen of the 23 cities tracked for their respective prime office rentals reported stable or increasing rents in Q4-2022, an increase compared to the 15 cities in the previous quarter.
“Solid macroeconomic fundamentals and strong domestic growth have mitigated the impact of global turbulences over the Indian economy. The office market has experienced a robust recovery from the pandemic lows along registering the second-best historic year for demand. This in turn has strengthened rent growth across most markets, signifying the sustained momentum in demand. While the Indian economy recovers gradually, global economic cues remain tense as inflation continues to trigger more liquidity tightening measures across the globe. With the pandemic having little material impact on businesses, the evolving story of global economic growth could have a greater bearing on market traction going forward,” says Knight Frank India CMD, Shishir Baijal.
In terms of occupancy cost of the prime office markets, Hong Kong SAR recorded the highest cost of $174.3 sqft/year in Q4-2022. Among the Indian cities, NCR recorded occupancy cost of $78.7 sqft/year followed by Mumbai with $70.8 sqft/year and Bangalore of $36.3 sqft/year.
Occupancy cost in Q4 2022
| City | $ per sqft per year |
| Hong Kong SAR | 174.3 |
| Singapore | 109.8 |
| Tokyo | 92.8 |
| Sydney | 92.0 |
| Seoul | 83.4 |
| Delhi-NCR | 78.7 |
| Beijing | 77.5 |
| Mumbai | 70.8 |
| Ho Chi Minh City | 70.7 |
| Shanghai | 64.4 |
| Shenzhen | 56.6 |
| Melbourne | 55.3 |
| Brisbane | 52.8 |
| Perth | 51.8 |
| Taipei | 49.6 |
| Guangzhou | 47.9 |
| Bangkok | 47.4 |
| Auckland | 41.6 |
| Bengaluru | 36.3 |
| Phnom Penh | 34.2 |
| Manila | 32.6 |
| Jakarta | 27.8 |
| Kuala Lumpur | 18.8 |
Source: Knight Frank Research
