Prime Office Rents in India's Top Markets Show Robust Growth
India's prime office market shows strong growth, with rents in key metropolitan areas experiencing significant increases. Bengaluru, Delhi-NCR, and Mumbai collectively saw a 4.3% year-on-year growth in office rents for July-September. Bengaluru led with 8.8% growth, followed by Mumbai at 3.9% and Delhi-NCR at 3.0%. Current rental rates are highest in Delhi's Connaught Place at Rs 4,200 per sq ft annually. Office space leasing across these cities is projected to reach 50 million sq ft by 2025, driven by demand from Global Capability Centres and revival in third-party IT services.
*this image is generated using AI for illustrative purposes only.
India's prime office market is displaying strong signs of growth, with rents in key metropolitan areas showing a significant uptick. According to recent data from Knight Frank, the office rental market in India's three major cities - Bengaluru, Delhi-NCR, and Mumbai - has experienced notable year-on-year growth in the July-September period.
Rental Growth Across Major Markets
The prime office rents in these three key markets collectively grew by 4.3% compared to the same period last year. Here's a breakdown of the growth rates and current rental rates:
| City | Annual Growth | Current Rental Rate (per sq ft annually) |
|---|---|---|
| Bengaluru | 8.8% | Rs 1,807 (CBD) |
| Mumbai | 3.9% | Rs 3,953 (BKC) |
| Delhi-NCR | 3.0% | Rs 4,200 (Connaught Place) |
Bengaluru emerged as the leader with an impressive 8.8% annual growth, showcasing the city's robust demand for office spaces. Mumbai and Delhi-NCR followed with growth rates of 3.9% and 3.0% respectively.
Current Rental Rates
The current rental rates reflect the premium nature of these office spaces:
- Delhi's Connaught Place commands the highest rate at Rs 4,200 per sq ft annually
- Mumbai's Bandra Kurla Complex (BKC) follows closely at Rs 3,953 per sq ft annually
- Bengaluru's central business district (CBD) stands at Rs 1,807 per sq ft annually
Future Projections and Driving Factors
The office space market in these three cities is poised for significant growth. Projections indicate that office space leasing across Bengaluru, Delhi-NCR, and Mumbai is expected to reach 50 million sq ft by 2025. This forecast surpasses the previous record of 41 million sq ft set in 2024, highlighting a strong upward trend in the commercial real estate sector.
The growth is primarily attributed to two key factors:
- Sustained demand from Global Capability Centres
- Revival in third-party IT services
Emerging Corridors
Bengaluru, in particular, is witnessing strong demand in its emerging corridors. Areas such as Outer Ring Road and Whitefield are seeing increased interest, indicating a geographical expansion of the city's office market.
This robust growth in India's prime office markets suggests a positive outlook for the commercial real estate sector, reflecting the country's economic resilience and the continued importance of major urban centers in driving business growth.
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