Bengaluru may see highest growth in office rent in Asia-Pacific region at 5-7% next year: Report
Office rentals in Bengaluru is expected to grow by 5-7%-- highest in the Asia-Pacific region--during the next year, according to Knight Frank India.
In its latest report on 'Asia Pacific Outlook 2023', property consultant Knight Frank said that rent growth in the APAC region is expected to moderate in 2023 as corporate occupiers are looking to optimise overheads and generate savings.
"The steady performance of the Indian office markets seen in 2022 is expected to sustain in 2023," it said.
Bengaluru's prime office rental is expected to grow in the range of 5-7% YoY (year-on-year) in 2023, highest amongst the 24 APAC cities tracked in the report.
Mumbai and New Delhi are the other Indian cities tracked in the report.
New Delhi's prime office rental is expected to grow in the range of 4-6% YoY followed by Mumbai in the 3-5% YoY in 2023.
The consultant attributed the expected growth in office rentals to a comparatively strong economic outlook, potentially increased outsourcing from the west due to cost constraints and rupee depreciation.
Shishir Baijal, Chairman and Managing Director at Knight Frank India, said, "While recessionary forces in the west weigh on the global economy, the APAC region and India are expected to remain beacons of growth in an otherwise uninspiring economic backdrop."
In housing segment, the report mentioned that Bengaluru's residential price is expected to grow by up to 5% YoY in the next calendar year.
"Consistent growth of startups and unicorns coupled with rising income levels makes the city a strong market in the APAC region," it added.
Mumbai's residential price is expected to grow by up to 4% YoY in 2023. The residential price in New Delhi is expected to grow in the range of 2-3% in 2023.