Delhi-NCR ranks ninth in Asia Pacific in terms of occupancy cost for prime office space at $60.1 per square feet per year, according to Knight Frank India.
As per Knight Frank's Asia-Pacific Prime Office Rental Index for Q1 2022 that tracks 23 cities in the region, Hong Kong SAR is at the first position with an occupancy cost of $186 per square feet, followed by Singapore ($105), Tokyo ($101.2), Sydney ($98.6) and Beijing ($84.8).
"Hong Kong SAR continued to be Asia's most expensive office market with a cost at $186 per square feet per year. Delhi-NCR was the 9th most expensive market at $60 per square feet per year (Rs 376/sq ft/month)," Knight Frank said.
Mumbai at $50.9 per sq ft per year (Rs 318 per square feet per month) and Bengaluru at $26.7 per square feet per year (Rs 167 per square per month) were at 15th and 21st positions in terms of most expensive office locations, respectively.
Knight Frank India Chairman and Managing Director Shishir Baijal said: "The Indian office market scenario has started to improve since the removal of COVID related restrictions. More companies are recalling their staff to office."
Further, with the IT/ ITeS sector hiring upwards of 20 per cent new staff in the last 18–24 months, demand for office space is expected to rise further, he added.
"Bengaluru and NCR have seen a rise in leasing activities in Q1, 2022 with the cities recording transactions of 3.5 million square feet (msf) and 2.3 msf respectively. The rental outlook for Bengaluru is strong, indicating a possible increase in values in the coming year, based mostly on the expected rise in demand," Baijal said.
As per the report, amongst all cities of the APAC region, Bengaluru saw the highest growth in rental values in the first quarter at 5.8 per cent in Q1 2022 as compared to the previous quarter.
"With the change in the COVID-19 protocols, which are now leading more and more companies to call back their employees, there has been an uptick in transaction activities in the Bengaluru city. Adding to that, new completions have been deliberately kept low, keeping the values intact in the city," the report said.
Bengaluru is expected to see an upward trend in its rental value over the next 12 months. The city has an office inventory of 17.5 million square metres with a vacancy level of 12.6 per cent.
The rental value is expected to remain stable over the next 12 months in the Delhi-NCR market, which currently has an office inventory of 16.3 million square metres with a vacancy level of 14.7 per cent.
"The prime office market of Delhi-NCR witnessed no change in rental values in Q1, 2022 over the previous quarter, however recording an annual rental value growth of 1 per cent in Q1 2022," Knight Frank said.
The prime office market of the Mumbai Metropolitan Region (MMR) witnessed a de-growth of 1.9 per cent in Q1 2022 on an annual comparison.
The rental values remained stable over the previous quarter in Q1 2022. The rental value is expected to remain stable over the next 12 months. MMR currently has prime office inventory of 14.6 million square metres with a vacancy level of 20.6 per cent.
