Knight Frank’s Real Estate Report: Mumbai Tops Office Rental Costs In India!
According to Knight Frank India’s latest report, India’s top eight office markets saw a huge jump in office transactions in the third quarter of 2023. Mumbai was the most active, accounting for 20% of the total, with office space transactions amounting to 3.2m sq ft. Global corporations have been investing heavily in India, with 44% of office transactions attributed to the setting up and expansion of GCs. India’s economy is still driving growth, with 37% of office transactions amounting to 6m sq ft in the third quarter.
The rental market in India showed some interesting changes in year-on-year and quarter-on-quarter changes. Let’s take a closer look at each market. Kolkata had the biggest YoY rental growth, rising by 10%, but there was no change in rents compared to the last quarter. Bengalaluru had a positive YoY growth too, but at a lower rate of 5%. Quarter-on-quarter, rents rose by 2%, showing a steady and growing rental market. Chennai and Mumbai both had a similar YoY growth rate, with a 3% increase in rental prices and a 2% QoQ increase. Pune, NCR, and Ahmedabad all saw a 2% YoY increase, but no QoQ change, so it looks like rents stayed pretty steady in the third quarter.
Hyderabad didn’t see any growth in rental prices from the last quarter, and rents stayed the same. Global Capability Centers made up 44% of the demand in the quarter, which is up from 21% in the first three months of 2022. In Hyderabad and Pune, GCCs were the main players in terms of occupier activity, taking up 81% and 75% of the total area traded, respectively. Indian-facing businesses were still a big part of the market, accounting for 37% of the area traded in the third quarter of 2023.
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