Key Points

For Indian investors, prime rental markets such as London, New York, Singapore, and Sydney, remain firmly on the radar.

Construction shortfall across key cities began to bite in terms of supply, and the return to office trend has supported rental demand, especially in gateway markets across the world, according to Knight Frank’s latest Prime Global Rental Index.

Hong Kong (8.6 per cent) and Tokyo (8.3 per cent) recorded the fastest annual rental growth as New York (6.9 per cent) saw strong gains, with a significant 6.6 per cent quarterly rise.

European hubs like Berlin (4.9 per cent) and Frankfurt (4.7 per cent) maintained steady growth. London (1.5 per cent) and Singapore (1.5 per cent), while lower on the index, continue to show resilience, supported by international demand and constrained new supply.

“Indian investors have always had a strong affinity towards global gateway cities such as New York (Rank 3), Singapore (Rank 13) and London (Rank 14). The sustained rental growth in these markets reaffirms their appeal as stable long-term investment destinations,” said Shishir Baijal, Chairman and Managing Director, Knight Frank India.

Even in a high-interest rate environment, constrained supply and consistent demand are expected to support rental growth, making international prime property an attractive diversification strategy for Indian buyers, he mentioned.

Elevated interest rates and persistent inflation are tempering prime rental growth in major cities, as affordability constraints curb tenants’ ability to bid up rents. However, strong immigration underpins growth, and demand – set against limited new supply – will push rents towards long-term trend rates, said the report.

New York and Miami are expected to sustain mid-single-digit gains, while Hong Kong and Tokyo face moderation amid regulatory headwinds. European hubs such as Berlin and London should see tight new supply delivery support low- to mid-single-digit growth.

“Prime global rental markets are beginning to see a move back to trend rates of growth. While affordability is very tight in most markets, demand continues to outpace supply, and our view is growth will tick higher from here through 2025.,” said Liam Bailey, Knight Frank’s Global Head of Research.

—IANS

- IANS