Bengaluru CBD 5th fastest growing Asian office market in Q2; full list here
Indian office rents remained stable in Q2 as the market saw an influx of new supply in the first half (H1) of 2019, with 23 million sq. ft being added during the period
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With a nine per cent spike in rentals during the second quarter (Q2) of 2019, Bengaluru’s Central Business District (CBD) became the fastest growing prime office space in India, and the fifth across the Asia-Pacific region. Bengaluru's CBD saw the highest annual growth in rental values in India, with current rentals at Rs 125 per sq. ft per month, according to a survey conducted by Knight Frank.
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The report said Bandra Kurla Complex (BKC), the prime office market in Mumbai, was ranked eighth at the end of Q2 of 2019. BKC registered a growth of five per cent in the quarter and was commanding Rs 300 per sq ft a month.
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Connaught Palace (CP), the prime office market in the National Capital Region (NCR), was ranked 12th at the end of Q2 of 2019. CP, which had a rental value of Rs 330 sq ft a month, also recorded an annual rise of 1.4 per cent during the quarter.
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Phnom Penh in Cambodia saw a year-on-year rental growth of 0.6 per cent. The Knight Frank Prime Office Rental Index tracks rental levels of 20 front line cities across the Asia-Pacific region.
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Rentals in Jakarta, Indonesia's capital, saw rentals decline 11 per cent year-on-year.
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Kuala Lumpur saw rentals decline 0.7 per cent year-on-year.
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In Singapore, Grade A office rents were up 0.9% quarter-on-quarter on healthy net absorption, led mainly by the rapidly expanding co-working sector.
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Bangkok saw a year-on-year rental growth of 10 per cent with a rental value 1,144 Thai baht per sq ft.
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Manila’s prime office rents rose 1.9% quarter-on-quarter as landlords putting out new better-quality products continue to be able to command higher rents driven by higher demand from the IT-BPM and rapidly expanding Philippine Offshore Gaming Operators (POGO) sector.
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Rents in Brisbane, Australia, were up 0.7% quarter-on-quarter on positive net absorption and limited foreseeable supply pipeline.
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In Australia, Melbourne continues to do well with rents rising 3.7% quarter-on-quarter as limited available space, strong net absorption, a healthy economy and labour expansion continue to support rental growth.
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Another Australian city, Perth, saw year-on-year rental growth at 1.2 per cent and 0.8 per cent quarter-on-quarter.
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Rents in Sydney, Australia's largest city by population, rose 1.3 per cent quarter-on-quarter, again on limited available supply due to stock withdrawals for government-led infrastructure projects and subdued completion supply.
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The positive quarterly growth reading in Q2 2019, despite the generally soft economic climate, was driven mainly by Tokyo which recorded a 6.9 per cent quarter-on-quarter rise due to the limited supply conditions within the market. However, looking at the wider region, things were not as rosy.
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On the mainland, a softer Chinese economy and an oversupply situation continues to weigh on rents with Beijing and Shanghai recording 1.6 per cent and 1.1 per cent quarter-on-quarter declines.
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China's Guangzhou saw year-on-year rental growth at 1.5 per cent and 0.2 per cent, quarter-on-quarter.
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Shanghai saw rentals decline 1.1 per cent year-on-year and quarter-on-quarter as well.
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Hong Kong’s office rents contracted a further 1.1% quarter-on-quarter, driven by uncertainty over US-China trade tensions and softer economic conditions. Given the current situation with Hong Kong and expectations for significantly softer domestic economic conditions in Q3 2019; office rents should see a more pronounced decline for the rest of this year.
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Taipei's year-on-year rental growth was 2.2 per cent and one per cent quarter-on-quarter.
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South Korean Capital Seoul saw year-on-year rental growth at 0.1 per cent and 0.4 per cent quarter-on-quarter with a rental value 33,822 South Korean Won per sq. ft.
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First Published: Aug 28 2019 | 11:55 AM IST
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