Three metropolitans in India, which are already among the top 20 expensive office real estate rankings in Asia Pacific region, are most likely to emerge as top destinations that will witness office rental appreciation in 2019. These are Delhi, Mumbai and Bengaluru.
Delhi’s Connaught Place has consistently ranked one of the most expensive commercial places in the world and has good potential for appreciation of office rentals as India emerges one of the major economies of the world. The average rentals in Connaught Place stood at 81.4 USD per sq meters in 2018 and can see further climb up in rentals in 2019, according to property experts. Even other parts of Delhi and of neighboring Gurgaon and Noida can see massive increases in rents and yields in 2019. The parts of Delhi and its suburbs which are connected with Metro and have good overall infrastructure will see maximum firming up of the rentals. The coming up of the largest airport of the country at Jewar near Noida will result in appreciation of the property prices and rents in Noida and Greater Noida also.
The IT and ITeS sectors, together with co-working space providers have bene very active in Delhi NCR and are seen as the major contributors for growth and office space occupancy. Delhi NCR saw leasing volume of 7.4 million square feet in 2018. The total leasing volume in 2017 was about 6.5 million square feet. This there was an increase of 14 percent. Even the vacancy levels in Delhi NCR came down to 16 percent in 2018 as compared to 16.8 percent in 2017. All these factors weigh in favour of good appreciation in Delhi NCR commercial real estate market.
Mumbai Metropolitan Region Has Good Leasing Volumes
Mumbai Metropolitan Region has ranked 7th in Asia Pacific region for most commercial real estate destination and holds very good chances of rental appreciation among India cities. The Bandra Kurla Complex (BKC), with continued infrastructure development, had an average rent of 74.4 USD per sq meters in 2018. As the bullet train projects gains momentum, the rentals at BKC are quite likely to go up this year with the proposed stoppages of bullet train at this important office space hub. Even other commercial areas of Mumbai will see impressive growth in rentals owing to lower vacancy rates, according to property experts. The vacancy levels in Mumbai in 2018 stood at 19.6 percent, lower than 20.2 percent that was marked in 2017. With good leasing activity by Banking, Financial and IT sectors, apart from media and even co-working segments, the rents are likely to firm up.
Bengaluru Has Low Vacancy Levels
Bengaluru has also been a regular in the top rankings of commercial real estate in Asia Pacific region. It stood at 18th position in 2018 in the Asia Pacific region in terms of most expensive commercial property rentals and the central business district (CBD) comprising of Brigade Road and Mahatma Gandhi Road had an average rent of 28.6 USD per sq metres. The CBD and some of the other prime place sin Bengaluru are expected to see a decent rise owing to very low vacancy rates in the city, according to property experts. The vacancy rates in 2018 stood at mere 4 percent for Bengaluru while the leasing activity was hectic.
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