After businesses in North Bengaluru create more jobs, it will capture ~30 percent of overall office absorption by 2025
Prime offices in the Asia Pacific region will eventually increase rental prices due to returning demand and increasing economic activity. Since rates are low at the moment, tenants in the tech industry are already claiming premium spaces in CBDs.
Knight Frank presented data that shows rising office rentals in cities such as Bengaluru, Brisbane, Hong Kong, HCM City, Seoul, and Singapore over a 12-month period.
Its Asia Pacific Prime Office Rental index increased 0.8 percent QoQ in Q1 2022, compared to 0.3 percent during the previous quarter. This shows that economic recovery is sustained from Q4 2021 despite the Russian-Ukraine conflict weighing down on market sentiment during the first quarter.
According to the report, vacancies remain high at 13.1 percent, similar to Q4 2021. With the economic recovery, this should begin to decrease further. This quarter, more cities tracked by the index reported unchanged or higher rental rates. Shanghai had the biggest year-on-year (YoY) increase, while Bengaluru had the highest QoQ gain.
According to a report by Financial Express, North Bengaluru emerges as a new business hub, with several research and development, aerospace, automobiles, and pharmaceutical establishments having set up operations.
Additionally, research conducted by the Brigade Group and Meraqi Research suggests that not only Bangalore as a whole, but also North Bangalore, in particular, will continue to dominate the office leasing space not only within the country but as well as in the Asia Pacific region. Also, after businesses in North Bengaluru create more jobs, it will capture approximately 30 percent overall office absorption by 2025.
“The office market has been progressive post-COVID impact and demand is expected to continue primarily due to increasing demand for satellite offices which is propelled by a concurrent demand for residential units in the region. IT and ITeS remain the key occupier group with high demand for high quality office spaces that are hygienic and health conscious,” said Nirupa Shankar, Executive Director of Brigade Group.
The Property Report editors wrote this article. For more information, email: [email protected].
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