Office rent trends: Delhi is the 6th most expensive market in Q3 2024, Mumbai at 8th position

Delhi-NCR ranked as the 6th most expensive office space rental market in the APAC region, where prime office rent was recorded at Rs 340/sqft/month. Hong Kong SAR remains the most expensive office market in APAC. as per the latest edition of the Asia-Pacific Prime Office Rental Index for Q3 2024 by Knight Frank. 

Mumbai's prime office rent was recorded at Rs 317/sqft/month and was the 8th most expensive commercial market in the APAC region.

Prime rents in Delhi NCR remained steady in Q3 2024, while Mumbai and Bengaluru witnessed year-over-year increases of 5% and 3% respectively. This growth is attributed to strong occupier demand and limited new supply.

Prime office rentals in Delhi-NCR, Mumbai, and Bengaluru have shown resilience year-on-year, with rental rates projected to remain steady in the upcoming 12 months. Of the 23 cities surveyed, 16 reported either stable or increasing rents compared to the previous year, a slight increase from 15 in Q2 2024. Brisbane stood out with the highest year-on-year growth in Q3 2024, signaling a positive trend in various markets. Vacancy rates in the region have marginally decreased by 0.2 percentage points, indicating a stabilization in the market.

Transaction volumes in the office space market of Delhi NCR, Mumbai, and Bengaluru reached all-time highs in Q2 and Q3 2024. The increase is mainly driven by Global Capability Centres (GCCs) and India-focused businesses. This surge reflects optimism about India’s economic future, abundant talent pool, favorable business regulations, and the expanding consumer markets.

Bengaluru experienced the highest volume growth in Q3 2024, with a 158% year-over-year increase. 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.

Shishir Baijal, Chairman and Managing Director, Knight Frank India, said: "The resilience of the Indian economy continues to attract strong global corporate interest, as reflected in the sustained demand across India’s major office markets. Quarterly transaction volumes have reached record highs and are likely to exceed annual benchmarks in 2024, while rental rates remain stable. This positive outlook, supported by consistent physical occupancy, steady rent levels since 2022, and rising demand in 2024, underscores our confidence in the sustained strength of the Indian office market in the near to medium term."

Bengaluru, which was at 18th position on the list, is one of the least expensive prime office markets in the APAC region. The prime office rent of the city was recorded at Rs 138/sqft/month. The rental value in the city is projected to remain steady during the following 12 months.