Connaught Place third-most expensive office district in Asia-Pacific: Report


Established business districts across key Indian metros dwarfed many mature international markets, in terms of rental growth and overall gross effective rents, says a report by Knight Frank

Commanding gross effective rentals of USD 88.8 per sq metre per month, Connaught Place in Delhi, emerged as the third-most expensive office district among global peers across 20 international cities, on the index topped by Central, the prime office pocket in Hong Kong (USD 212 per sq metre per month), according to the Knight Frank Asia-Pacific Prime Office Rental Index Q4 2017. Mumbai’s Bandra Kurla Complex (BKC) was the fifth-most costly office conclave on the list, with gross effective rentals of USD 80.1 per sq metre per month. BKC improved its position by two placed, over Q4 2016.

In terms of rental appreciation, Bengaluru’s Central Business District (CBD) recorded the third-highest growth with YoY increase of 5.40 per cent in the 12 months to Q4 2017. While Connaught Place (five per cent) ranked fifth by this measure, BKC (four per cent) stood at the 10th position. Projections for the subsequent 12-month period, indicate rental growth in BKC and Bengaluru but it is expected to plateau at Connaught Place.

See also: Bengaluru leads office space absorption in 2017: Colliers report

Overall, the index recorded 1.1 per cent YoY growth in the last quarter of 2017, propelled by solid economic performances across the Asia-Pacific region. This was primarily driven by rising rents in 12 of the markets over the quarter. Further, rentals across at least 16 out of the 20 markets tracked, are either set to appreciate or stay stable, the report added. Demand in co-working and technology-related spaces is expected a play a major part, in pushing rents up.

Speaking on the report findings, Samantak Das, chief economist and national director-research, Knight Frank India, said, “Rental growth continues to be strong across prime office markets in India, on account of an ongoing supply crunch in the country. This, coupled with strong occupier demand, is expected to drive the rentals up in the next 12 months in the prime office markets of Mumbai and Bengaluru. However, we expect rental growth to remain stable in Connaught Place.”

 

Asia-Pacific prime rental index – Q4 2017

CitySub market12-month percentage change (Q4 2017)Ranking – 12 monthsGross effective rent (in USD/sq m/month)**Ranking – Gross effective rentals
BengaluruCBD5.40329.818
MumbaiBKC4.001080.15
New DelhiConnaught Place5.00588.83
Kuala LumpurCity Centre-1.502016.720
ManilaVarious6.30221.919
BrisbaneCBD2.801330.417
PerthCBD2.001530.616
PhnomPenh2.801230.715
MelbourneCBD4.30936.114
BangkokCBD4.40736.813
JakartaCBD0.401738.512
TaipeiDowntown3.101140.811
GuangzhouCBD4.60647.510
SydneyCBD6.90157.99
ShanghaiPuxi, Pudong-1.001967.88
SeoulCBD, GBD, YBD4.30873.47
SingaporeRaffles1.001676.16
BeijingVarious-0.601882.64
Tokyo*Central2.4014912
Hong KongCentral5.2042121

Note: Gross effective rentals – Inclusive of incentive, service charges and taxes. Based on net floor areas** / *Sanko Estate

 

Asia-Pacific prime rental index – Q4 2016

CitySub market12-month percentage change (Q4 2016)Ranking – 12 monthsGross effective rent (in USD/sq m/month)**Ranking – Gross effective rentals
New DelhiConnaught

Place

4.30881.33
MumbaiBKC4.80672.17
BengaluruCBD5.20526.518
Hong KongCentral6.104199.41
Tokyo*Central2.801092.22
BeijingVarious1.901180.24
SeoulCBD,-0.201473.15
SingaporeRaffles-11.901872.56
ShanghaiPuxi4.50766.28
SydneyCBD10.101529
GuangzhouCBD1.101244.210
JakartaCBD-18.201939.711
TaipeiDowntown-0.701538.312
MelbourneCBD7.00332.713
BangkokCBD8.70231.314
PhnomPenh2.9093015
PerthCBD-1.601728.716
BrisbaneCBD1.001328.117
Kuala LumpurCity Centre-0.901616.219

Note: Gross effective rentals – Inclusive of incentive, service charges and taxes. Based on net floor areas** / *Sanko Estate

 

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