Office rentals to increase over next three to twelve months

May 25, 2018: Office rentals in the cities of National Capital Region, Mumbai and Bengaluru are expected to increase over the next three to twelve months, according to a recent RICS’ India Commercial Property Monitor.

RICS’ India Commercial Property Monitor is a quarterlyguide to the trends in the commercial property investment and occupier markets.The guide is based on survey questionnaires sent out to RICS members over amonth long period ending 11 April, 2018. Respondents were asked to compareconditions over the latest three months with the previous three months and givetheir views on the outlook. 

Industrial and retail rents are also expected toincrease over this period. Demand for office space has increased with 37 percent of respondents reporting a rise in demand. All three segments of themarket (office, industrial, retail) saw demand increase, at an acceleratingrate compared to Q4, 2017. Supply of properties for office, industrial andretail is stagnant for the sixth consecutive quarter. Respondents howeverreported a modest increase in the supply of office space to rent. 

Capital values are expected to increase across marketsegments of office, retail and industrial. Significant increase is expected inprice of prime office space, followed by prime retail assets. Secondary marketsare expected to see a slightly more modest rise in comparison. 

The Occupier Sentiment Index increased to +18 in Q1from +11 in Q4. This is the highest reading since Q1 of 2011.

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