Bengaluru, Delhi, Mumbai CBDs top global prime office yields earners: Knight Frank
Three Indian metros–Bangalore, Delhi and Mumbai have emerged as the top prime office yields earners in the world. Among the 34 leading international markets across the globe, Bangalore topped the chart with 10% annual rental yield, showed Knight Frank Global Cities report for 2018. On the basis of current rentals, Delhi and Mumbai followed Bangalore with 9.2% and 8.5% yields, respectively.
According to the report, among tech districts, Gurgaon’s Cyber City with average annual rentals of $20.40 has surpassed Madrid’s Julian Camarillo area that fetches average rent of $13.65 and Kuala Lumpur’s Cyberjaya Office Market’s $11.55.
“Desires of the talent pool and rising disposable incomes are set to shape our urban environments in the near future. Global cities that are aspirational and successful in encapsulating an inherent wow factor are set to see the most dramatic transformation. We have already seen glimpses of the transformation with a shift in the expectations of mainstream occupiers. Today we see that the office space expectations of mainstream occupiers resembling those of niche sections such as the start-up fraternity or the Googles of the world. The global trend holds true for select Indian cities such as Bengaluru and Mumbai,” Samantak Das, Chief Economist & National Director – Research, Knight Frank India. Bangalore’s Whitefield is the most affordable tech district among 29 global tech hubs in the world, showed the report.
India’s financial capital Mumbai has ranked 6th on the Skyscraper Index growth in six months to the quarter ending June 2017, outpacing London (0.0%), Hong Kong (1.1%), Tokyo (0.0%) and Dubai (0.0%) in rental growth. Prime office rents in the upper floors of high-rises in Mumbai saw 1.8% growth.
“India’s office market witnessed a stellar run in 2016 as compared to the recent past. It is also a fairly accepted fact that India is home to some of the most affordable Central Business Districts in the world. Bengaluru’s Whitefield is a case in point. Despite the influence of global headwinds on mainstream occupiers, emerging trends such as Co-working space providers have continued to whip up demand in the supply-deprived market,” said Viral Desai, National Director, Occupier Solutions Group, Knight Frank India.
Based on a parameter of how much space $100 million could buy across various markets in the world, Bangalore emerged as the most affordable with over half a million sq ft of prime office space that can be bought in that budget. Delhi emerged as the most expensive office market in India on this parameter followed by Mumbai.