Prime office rentals in three major cities in India to remain stable: Knight Frank

A report by real estate agency Knight Frank said prime office rentals across Mumbai, Bengaluru, and National Capital Region (NCR) markets are expected to remain stable in rental values for the next 12 months. According to Knight Frank's latest report – Asia Pacific Prime Office Rental Index Q1 2021, the Bandra Kurla Complex (BKC) in Mumbai saw a recovery in office rents to negative 0.8% quarter-on-quarter (QoQ) during the January to March quarter compared to negative 5.5% in the previous quarter. The recovery can be attributed to improved transaction activity. Knight Frank predicts the decline in rents to decelerate this year, with overall rents expected to decline by 3% in the Asia Pacific region compared to the 4.8% decline seen in 2020. The central business district of Bengaluru, comprising areas like Infantry Road, MG Road, and Residency Road, registered a decline of 3% QoQ in Q1 2021 against a decline of 4% in Q4 2020. For office rents, Connaught Place (NCR) saw a flat price change in Q1 2021 compared to a negative 1% in Q4 2020. According to the index, Taipei is the only city that is expected to witness an increase in office rental values across the Asia Pacific region in the next 12 months. Out of the 22 cities tracked by the index, eight recorded either stable or increased rents in the past quarter compared to 10 in the previous quarter. For Q1 2021, Knight Frank's Asia-Pacific prime Office Rental Index fell negative 1.2% QoQ led by large office markets like Hong Kong, Tokyo and Bengaluru, which recorded a rental decline between negative three to negative 2.8% during the same period. On a yearly basis, the overall index was down negative 5.5% year-on-year. As per the report, while office market conditions are expected to remain soft for most of 2021, the rate of rental decline is expected to reduce, driven by improving economic conditions as landlords rein in the rental incentives that were on the table in 2020 and workers gradually re-occupying offices. Image SourceAlso read: Over 7,400 office leases up for renewal in 2021 Also read: Co-working startup leases 2.5 lakh sq ft in Hyd