Office rents are again going north in Bengaluru, Mumbai and the National Capital Region, after a considerable interval. Increased leasing (especially in the first quarter of 2015) and improved optimism after the National Democratic Alliance (NDA) came to power last year are reasons for the trend.
In Bengaluru, the rents have gone up 7-16 per cent in April, according to a report by Colliers International.
“Gross absorption in Bengaluru has been more than supply in the last three to four years, which has reduced vacancy levels from over 15 per cent in 2010 to 12 per cent now,” said Amit Oberoi, national director, valuation and advisory services and research at Colliers International.
Average rents have moved from Rs 40/sq ft in 2010 to Rs 60/sq ft now, says the report.
Barring Kalina and Central Business District comprising Nariman Point and Fort, which have seen a drop of 9 per cent and 7 per cent respectively, Mumbai is also seeing an increase in rents, the report said. According to the report, Mumbai has seen increase of 2-22 per cent in April.
“In Mumbai, inquiries have gone up and absorption is also rising. Though supply and overall vacancies are much higher than Bengaluru, leasing has improved in Mumbai,” said Oberoi.
In Mumbai, average rents are hovering around Rs 150/sq ft for the last five years but vacancies are moving upwards of 15 per cent.
Barring Udyog Vihar in Gurgaon and Saket in Delhi, NCR has seen an increase in rents in most of the places. Vacancies have moved up from 8 per cent in 2010 to close to 20 per cent.
“While Gurgaon is seeing higher absorption and rents are firming up, Noida is not seeing the same traction,” said Oberoi.