Rentals for prime office spaces rose by an average 7% year-on-year to ₹83 per square feet per month across seven major cities during the first six months of the current fiscal on rise in construction cost. Grade A office rental values averaged at ₹83 per square feet per month across seven major cities against ₹77.50 per square in the year-ago period.
The first half of this fiscal year remained lackluster for commercial office space activity across the top seven cities, with both net absorption and new completions remaining largely stagnant compared to the same period last year. New office supply rose 5% and net office absorption saw a marginal decline of 1% during the period under review, the consultant pointed out. Interestingly, average rental values across the top 7 cities witnessed a 7% growth in H1 FY24, as compared to the same period in FY23, essentially due to increased construction and input costs.
During the April-September period of this fiscal, Chennai witnessed the highest 10% year-on-year increase in average monthly office rental values to ₹68 per sq ft from ₹62 per square feet in the year-ago period. Hyderabad saw a 8% increase in average rent to ₹66 from ₹61 per square feet. Bengaluru, Pune, and Kolkata each saw 7% annual growth in office rent, while Mumbai Metropolitan Region (MMR) and Delhi-NCR registered 5% increase each.
Average monthly office rental in Bengaluru rose to ₹90 per square feet from ₹84 per square feet. In Pune, the average office rental grew to ₹79 from ₹74 per square feet a month, while in Kolkata rentals increased to ₹58 per sq ft from ₹54 per square feet. MMR, the most expensive office market in the country, saw rental increasing to ₹136 per square feet from ₹130 per sq ft. In NCR, the average office rentals rose to ₹85 from ₹81 per square feet.