region in Q2 2022 at 12.1%, followed by Mumbai at 7% YoY: Knight Frank
Asia-Pacific Prime Office Rental Index Q2 2022
Mumbai’s prime office rental market achieves the highest sequential growth
Delhi-NCR is the most expensive prime office market in India; ranks 10th in the
APAC region
Mumbai, 26 th July, 2022: Knight Frank, in its recent edition of the Asia-Pacific Prime Office Rental
Index for Q2 2022 noted Delhi-NCR as the 10 th most expensive commercial real estate market in the
APAC region. The annual prime headline rent of commercial office space in the city was recorded at
US$ 51.6/sqft/year). Hong Kong SAR continued to be Asia’s most expensive office market with an
annual rent of US$ 175.4/sqft/year.
In terms of annual growth, Bengaluru witnessed the highest prime office rental percentage increase
of 12.1% YoY in Q2 2022. Mumbai achieved the highest quarterly change at 7% in its prime office
rental value. The APAC office rental index registered a growth of 1.0% quarter-on-quarter (QoQ),
after gaining for two consecutive quarters. The overall index is up by 2.0% year-on-year. Of the 23
cities tracked by Knight Frank’s Asia-Pacific Prime Office Rental Index, 17 cities recorded stable or
increasing rents in Q2 2022, as compared to 21 in the previous quarter.
Shishir Baijal, Chairman and Managing Director, Knight Frank India said, “As the economy stabilises
post pandemic, there is a rise in new hiring across most industries along with a move towards return
to office which is propelling demand for offices in India. The Indian office market witnessed strong
leasing trend that continued into Q2 2022 with Bengaluru leading in transaction volumes. With its
unique position, India can expect its key driving sectors such as IT/ ITeS to continue to grow despite
global headwinds.”
Key highlights of the performance of key Indian cities:
Mumbai
The prime office rent of the city was recorded at INR 3,622/sqft/year and was the 11 th most
expensive commercial market in the APAC region. The prime office market of the city grew 7% YoY
after three quarters of stagnation. The rental value is expected to increase over the next 12 months.
Delhi-NCR
The prime office market of Delhi-NCR continues to see rental values maintain levels seen in the past
four quarters. However, the rental value is expected to increase over the next 12 months as
transaction volumes are expected to pick up going forward. The prime office rent of the city was
recorded at INR 4,078/sqft/year.
Bengaluru
With an increase of 12.1% YoY, Bengaluru was the best-performing prime office market in the APAC
region in terms of rental growth in Q2 2022 as compared to the last year. The rental value in the city
is projected to rise during the following 12 months. With the 22 nd position on APAC Prime Office
Rental Index, the city finds itself as one of the least expensive prime office markets in APAC region.
The prime office rent of the city was recorded at INR 1,620/sqft/year.
APAC Prime Office Rent, location – Rank by Occupancy cost (US$/ Sqft/ Yr)
RANK CITY
Q2 2022 PRIME
HEADLINE RENT
(US$ / SQ FT/
YEAR)
1 Hong Kong SAR 175.4
2 Sydney 93.3
3 Singapore 89.4
4 Tokyo 70.1
5 HCMC 56.0
6 Beijing 54.8
7 Melbourne 53.7
8 Perth 52.5
9 Brisbane 52.3
10 NCR 51.6
11 Mumbai 45.8
12 Shanghai 43.7
13 Auckland 39.0
14 Bangkok 35.5
15 Taipei 32.5
16 Shenzhen 32.4
17 Seoul 32.4
18 Guangzhou 30.5
19 Manila 29.3
20 Phnom Penh 27.2
21 Jakarta 25.5
22 Bengaluru 20.5
23 Kuala Lumpur 15.6
Source: Knight Frank Research
Asia Pacific Prime Office Rents for Q2 2022 Asia Pacific Prime Office Rents for Q2 2022
(ranking provided basis Quarterly changes) (ranking provided basis Annual changes)
CITY QUARTERLY CHANGE (QOQ
%)
Mumbai 7.0%
Bengaluru 4.9%
Brisbane 3.3%
Sydney 3.0%
Perth 1.7%
Phnom Penh 1.2%
Singapore 1.1%
Manila 0.8%
Shenzhen 0.6%
Taipei 0.5%
Hong Kong
SAE 0.4%
Bangkok 0.4%
New Zealand
( Auckland) 0.0%
Seoul 0.0%
New Delhi 0.0%
Guangzhou 0.0%
Beijing 0.0%
Tokyo -0.1%
Shanghai -0.3%
Kuala
Lumpur -1.0%
HCMC -2.0%
Jakarta -3.5%
Melbourne -3.8%
CITY ANNUAL
CHANGE (YOY %)
FORECAST NEXT
12 MONTHS
Bengaluru 12.1% Increase
Mumbai 7.0% Increase
Singapore 4.0% Decrease
Shanghai 4.0% Flat
Sydney 3.6% Flat
Brisbane 3.6% Decrease
Tokyo 3.0% Increase
Seoul 2.7% Increase
Hong Kong
SAE 2.6% Flat
Perth 2.3% Decrease
Kuala
Lumpur 1.8% Increase
Taipei 0.2% Increase
New Delhi 0% Decrease
Bangkok -0.2% Flat
Beijing -0.6% Decrease
Shenzhen -1.5% Flat
Guangzhou -1.5% Increase
HCMC -2.8% Decrease
Manila -3.1% Flat
New Zealand
( Auckland) -3.6% Flat
Melbourne -3.8% Flat
Jakarta -5.8% Flat
Phnom Penh -7.2% Increase
Sharing an overview of the prime office performance in the APAC region, Tim Armstrong, Global
Head, Occupier Strategy and Solutions, Knight Frank, said: “As we move into H2 2022, we expect
utilization rates to increase as office re-occupancy rates continue to nudge upwards. While hybrid
working is here to stay, adoption in the region will likely be more gradual with most occupiers
expected to embrace an office-first approach; work culture in most of the region will also tend to tilt
strategies towards those that continue to emphasize the importance of the centralized office. As
occupiers orient and pilot workspace design around such strategies, it will facilitate, and
consequently, bolster a return to the office. APAC is still in a relatively good position to handle the
volatility in the short term despite the multiple headwinds in the macro-environment. Leasing
momentum is expected to remain more resilient as economies recover from the pandemic. However,
should inflation stay elevated and central banks’ tightening continue to outpace growth, the post-
pandemic recovery could weaken, and occupiers may take a wait-and-see attitude towards lease
commitments.”
Highlights for Q2 2022:
Of the 23 cities tracked by the index, 17 cities recorded stable or increased rents this past
quarter, as compared to 21 in the previous quarter.
The rental growth, Quarter-on-quarter growth in Q2 2022 was up by 1%. This is the third
consecutive quarter that has seen rental growth.
Year-on-Year (YoY), the overall index is up 2.0%, the third consecutive rise. Overall, vacancy
improved by 1.9% from Q1 2022.
Rents for almost half of the cities tracked in the index have returned to pre-pandemic levels.
Singapore is the only city to have sustained rent expansion since Q3 2021, indicating strong
business confidence in the city-state.
Bengaluru recorded the highest year-on-year growth at 12.1%.
On a quarterly basis, Mumbai saw the highest prime office rental increase by 7.0%.
