With 7% growth Q-on-Q, Bengaluru tops the Knight Frank Asia-PacificPrime Office Rental Index

Bangalore, September4, 2018:Knight Frank, the independent global property consultancy, today launched its Asia-Pacific Prime Office Rental Index for Q2 2018. The index increased by 2.4% quarter-on-quarter in Q2 – almost three times that of Q1 at 0.9% – primarily driven by rent increases seen in Tokyo, Bengaluru, Hong Kong and Sydney. Key Asia Pacific findings: • The index rise was primarily driven by rent increases seen in Tokyo, Bengaluru, Hong Kong and Sydney. • Rents are expected to remain steady or see marginal increases for the rest of 2018. • Kuala Lumpur’s office market saw the steepest decline, with a 0.8% decrease quarter-on-quarter amidst political uncertainty and supply concerns. Key India findings: • Bengaluru topped the index at a 7% quarter-on-quarter increase. Tight supply pushed rents up as large corporates jostle for quality space within a finite market. o Though rentals in Bengaluru’s CBD had stagnated in the previous two quarters, heightened occupier demand from co-working and IT/ITeS segments caused many developers to charge a premium for available spaces. o CBD also garnered the second highest share of Bengaluru’s transaction volume in first half of 2018 and remains popular with a diverse occupier base • For the other markets in India viz Mumbai and Delhi NCR, rental growth was generally flat thisquarter o Mumbai market witnessed stable rentals although the outlook in terms of rental growth remains positive Speaking on the report findings, Arvind Nandan,Executive Director - Research, Knight Frank India, said “Shortage of quality spaces has led to a 7% quarter-on-quarter rental growth in Bengaluru’s Central Business District (CBD) in Q2 2018. Corporate occupiers are jostling forquality space within the tightly suppliedCBD and off-CBD districts, with many of them navigating the issue by pre-committing to upcoming supply. Similarly, in Mumbai where the rentals have remained unmoved this quarter, limited supply is likely to lead to rental growths in the ensuing period.”


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