Delhi-NCR and Mumbai are among the top ten markets in Asia Pacific region (APAC region), driven by demand from Global Capability Centres (GCCs) and India-focused businesses, as observed in Knight Frank APAC Prime Office Rental Index.

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Delhi-NCR secured sixth place in the most expensive office space rental market across the APAC region, the latest edition of the Asia-Pacific Prime Office Rental Index for Q3 2024 shows.

Hong Kong special administrative region (SAR) continues to be APAC's most expensive office market during the quarter.

Prime rents in the NCR remained stable in the third quarter (Q3) 2024, while Mumbai and Bengaluru saw year-over-year (YoY) increases of 5 per cent and 3 per cent, respectively, driven by strong occupier demand and limited new supply.

In second quarter (Q2) and (Q3) 2024, combined transaction volumes across these three markets hit consecutive all-time highs. The report noted that the surge reflects optimism about India's economic future, its rich talent pool, business-friendly regulations, and the ongoing growth of its vast consumer markets.

In Q3 2024, Bengaluru saw the largest volume growth, up 158 per cent YoY. Bengaluru's standing as a GCC hub was further supported by the fact that 62 per cent of the space traded in the city was from GCCs. The majority of Mumbai and NCR's business volume was made up of companies that dealt with India.

Prime office rentals in Delhi-NCR, Mumbai, and Bengaluru remained robust year-on-year, and rental rates are expected to stay stable over the next 12 months. Overall, 16 out of the 23 monitored cities reported stable or increasing rents year-on-year, up from 15 in Q2 2024.

Notably, Brisbane recorded the highest year-on-year growth in Q3 2024, reflecting a positive trend across many markets. The stabilising vacancy rates across the region have declined marginally by 0.2 percentage points.

Shishir Baijal, Chairman and Managing Director, Knight Frank India, said, "The resilience of the Indian economy continues to attract strong global corporate interest, as reflected in the sustained demand across India's major office markets. Quarterly transaction volumes have reached record highs and are likely to exceed annual benchmarks in 2024, while rental rates remain stable. This positive outlook, supported by consistent physical occupancy, steady rent levels since 2022, and rising demand in 2024, underscores our confidence in the sustained strength of the Indian office market in the near to medium term."

The prime office market of Delhi-NCR continues to see rental values maintain levels seen in the past four quarters, the report observes.

The prime office rent of the city was recorded at Rs 340/sqft/month, making it the 6th most expensive office market in the APAC region, as per report.

The prime office rent of the city was recorded at Rs 317/sqft/month and was the 8th most expensive commercial market in the APAC region, the report added.

Bengaluru stands 18th on the list and is one of the least expensive prime office markets in the APAC region. The prime office rent of the city was recorded at Rs 138/sqft/month. The Knight Frank report added that the rental value in the city is projected to remain steady during the following 12 months.

The Asia-Pacific prime office sector is poised to remain tenant-favourable in 2024, it further added. Following the delivery of over 12 million sqm of office space in 2024, the supply pipeline for 2025 is expected to decrease by about one-fifth, as per the report.