Bengaluru’s office rent growth continues at 5%

BENGALURU: Colliers International, a global leader in commercial real estate services, has released its latest research report ‘Top Occupier Locations in Asia: Implications for Investors’. This report assesses the investment implications of Colliers’ recently released Top Locations in Asia: Technology and Top Locations in Asia: Finance reports for property occupiers. Based on a comprehensive study of 16 cities in developed and emerging markets across Asia, these reports examine 50-60 criteria across socio-economic, property and human factors to determine the best occupier locations in Asia.

“The investment momentum in Indian realty is expected to continue in the back drop of policy reforms and enhanced transparency coupled with strong growth fundamentals in cities such as Bengaluru. The measures taken by the government to improve the business environment have already started getting reflected in indicators like India’s ‘ease of doing business’ ranking which would further increase the attractiveness of India as an investment destination,” said Joe Verghese, Managing Director, Colliers International India.
India has attracted investments in the real estate sector which is expected to grow stronger. As per Real Capital Analytics (RCA), total transactions of completed properties in India grew by 21% YoY to USD 3.44 billion in first nine months of 2018. Investment interest is expected to increase further both because India offers Asia’s strongest long-run economic growth and the Asian market is least exposed to the U.S.-China trade war.

The Indian office market is dominated by technology groups, which account for 60-70% of gross absorption of office space, and Bengaluru with office stock of 141 million sq ft (13.1 million sq m) represents about one-quarter of the national total. The technology occupiers will continue to favor Bengaluru and Hyderabad. It predicted average annual rent growth of 4.1% over 2018-2021, and this growth rate should be sustained for several years afterwards. Given the outlook for firm and stable rental income, it expects capital values to rise at a similar 3%-4% rate. This should mean that Bengaluru’s high net yield of nearly 9% persists, driving continued investor demand for office assets. PR Newswire