Office Rent in Top 6 Indian Cities Soars Over Rs 100 Per Square Foot
Mumbai leads the pack with office rents at Rs 151.6 per sq ft, followed by Delhi-NCR and Bengaluru. Explore the trends and factors driving the surge in office space rentals.
Office RentCommercial Real EstateReal Estate TrendsOffice DemandTop CitiesReal Estate MumbaiOct 23, 2024
Before the pandemic, in 2019, the weighted average office rent stood at Rs 99.5 per square foot. The pandemic's onset in 2020 led to a significant drop to Rs 97.1 per square foot, as office demand plunged. The situation worsened in 2021, with rentals falling further to Rs 94.8 per square foot due to the second wave of the pandemic, which severely impacted the demand for office space.
However, the tide began to turn in 2022 when office demand started to recover post-pandemic. The weighted average rentals remained relatively stable at Rs 94.9 per square foot, reflecting the gradual return of employees to workplaces. In 2023, the weighted average rentals grew to Rs 96.5 per square foot, driven by continued improvement in demand and the return of a more stable office environment.
Among the six major cities, Mumbai leads the way with an average rental of Rs 151.6 per square foot. Delhi-NCR follows closely with rents at Rs 105.9 per square foot. Bengaluru, known for its tech hub status, has an average rental of Rs 96.7 per square foot. Pune, Chennai, and Hyderabad have average rentals of Rs 81.6, Rs 77.8, and Rs 76.7 per square foot, respectively.
The Weighted Average Quoted (WAQ) Rents are in rupees per square foot per month for warm shell offices and do not include Common Area Maintenance (CAM) or taxes. The data for 2024 is as of the end of Q3 2024.
Nidhi Marwah, founder and CEO of Ananta Karma Tattva India Pvt Ltd, a premium flex office space operator, commented, 'With demand and supply almost rivaling each other, the Indian commercial real estate sector should focus on delivering immersive and experiential workspaces. Consumer preferences are shifting from price sensitivity to value consciousness, and the market needs to adapt to this change.'
Colliers India, a leading real estate consultant, provides comprehensive data and insights into the commercial real estate market. Their reports help stakeholders make informed decisions and navigate the dynamic landscape of office space rentals.
As the market continues to evolve, the focus is on creating office spaces that not only meet the functional needs of businesses but also enhance the overall experience for employees. This shift is expected to drive further growth in the demand for premium office spaces, maintaining the upward trend in rental prices.
Frequently Asked Questions
Which city has the highest office rental rates in India?
Mumbai has the highest office rental rates, currently standing at Rs 151.6 per square foot.
How much did the average office rent drop during the pandemic in 2020?
The average office rent dropped from Rs 99.5 per square foot in 2019 to Rs 97.1 per square foot in 2020.
What is the weighted average office rent across the top six cities in India as of 2024?
The weighted average office rent across the top six cities in India as of 2024 is Rs 101.3 per square foot.
Which factors are driving the increase in office rent?
The increase in office rent is driven by the recovery in office demand post-pandemic, the return of employees to workplaces, and a shift in consumer preferences from price sensitivity to value consciousness.
What is the role of Colliers India in the commercial real estate market?
Colliers India is a leading real estate consultant that provides comprehensive data and insights into the commercial real estate market, helping stakeholders make informed decisions.
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