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Office spaces in Bengaluru, Mumbai among most affordable

Bengaluru has the lowest rentals in India followed by Delhi and Mumbai

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India's top three metros are among leading international cities that have the most affordable office spaces, earning the highest prime office yields.

According to a Knight Frank report featuring 34 international markets, Bengaluru has the lowest rentals in India followed by Delhi and Mumbai.

Globally, the report lists Bengaluru with 10% yield, while Delhi and Mumbai have a yield of 9.20% and 8.50%, respectively.

Bengaluru's Whitefield is the most affordable tech district among 29 global tech hubs in the world. Gurugram's Cyber City, ranking 25th on the Tech Districts Index with $20.40 rent for one square foot of office space, beats Madrid's Julian Camarillo area ($13.65) and Kuala Lumpur's Cyberjaya office market ($11.55), states 'Global Cities: The 2018 Report'.

According to Vivek Rathi, vice president – research, Knight Frank India, "The IT sector in Bengaluru has transformed the city's character, turning the pensioner's paradise into a bustling cosmopolitan hub. This has stirred up its real estate market, which has become a major global office destination. The inclusion of Bengaluru in the Smart City list will lead to improved infrastructure, providing smart solutions to bridge service delivery gaps and enable technology use. This will further attract real estate investors to the city."

When looking at how many square feet of office space $100 million could buy in 34 cities across the world, Hong Kong is the most expensive at 11,698 sq ft. New Delhi ranks 23rd with 156,304 sq ft, followed by Mumbai at the 26th spot (163,032 sq ft) and Bengaluru being the cheapest at the availability of 512,385 sq ft.

On the skyscraper index front, Hong Kong tops the rental chart followed by New York's Manhattan, Tokyo, San Franciso, London, etc. Mumbai ranks 16th on this index. However, when looking at the growth of skyscrapers globally, Mumbai is in the sixth spot. While, established office markets such as Singapore and Kuala Lumpur see degrowth in skyscrapers at -0.9% and -0.8%, respectively.

Viral Desai, national director, occupier solutions group, Knight Frank India, shared, "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. 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."

NOT-SO-STEEP

  • Bengaluru has the lowest rentals in India followed by Delhi and Mumbai
     
  • Among global tech hubs, Bengaluru’s Whitefield is the most affordable tech district
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