India Office Rents Surge 3.8%: Mumbai, Delhi Lead Post-COVID Boom

Mumbai emerged as the topper in India’s city ranking with the highest quarterly rental growth of 3.6 per cent QoQ, according to the quarterly Commercial Property Rental Index from the Indian Institute of Management Bangalore and CRE Matrix.

Gurugram and Delhi emerged as the other strongest markets across India's major cities.

Delhi leads in annual growth, with rents soaring 16.4 per cent YoY, reflecting the premium commanded by scarce high-quality office assets in the city, the report said.

Gurugram recorded a 3.2 per cent increase quarter-over-quarter and an 8.1 per cent rise over the last 12 months. Navi Mumbai recorded the highest three-year compound annual growth rate at 9 per cent, making it India’s most resilient post-COVID office market, the report said.

Chennai’s northern suburbs led the quarterly growth at 9.8 per cent, while Bengaluru’s Whitefield grew by 8 per cent quarter-on-quarter, maintaining the highest rental index value at 243.

Abhishek Kiran Gupta, CEO and Co-founder, CRE Matrix, said that Bengaluru’s Whitefield and Chennai’s northern suburbs’ sharp quarterly uptick proves that tenant demand is spreading beyond the traditional CBDs.

Over the past five years, the Central Business District of Navi Mumbai posted an exceptional 9.6 per cent CAGR, the institute noted.

“We hope CPRI will become the go-to benchmark for not only the landlords and tenants but also investors in REITs,” said Prof. Venkatesh Panchapagesan, Chairperson, Real Estate Research Initiative (RERI) and faculty of the Finance & Accounting area, IIMB.

Unlike conventional price-based indices that rely on headline rents, the IIMB-CRE Matrix CPRI focuses on effective rents, which adjust for variations in lease terms such as rent-free periods, abnormal security deposits, free car parks and escalation clauses, the report said.

- IANS