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Bengaluru, Delhi and Mumbai CBDs top prime office yields earners in the world: Knight Frank Global Cities - The 2018 Report

Knight Frank presents the future of real estate worldwide in the fourth edition of the Global Cities: The 2018 Report. The flagship global report reveals the trends shaping 40 leading international cities across the globe.

 

Key Findings:

 

Overview

 

  • Three Indian metros Bengaluru, Mumbai and Delhi earned the highest prime office yields among 34 leading international markets.
  • Bengaluru topped the table with 10% yields followed by Delhi (9.20%) and Mumbai (8.50%)

 

 PRIME OFFICE YIELDS INDEX

 

TECH DISTRICT

 

  • · Bengaluru’s Whitefield is the most affordable tech district among 29 global tech hubs in the world. 
  • · Ranking 25th on the Tech Districts Index, Gurugram’s Cyber City (USD 20.40) beats Madrid’s Julian Camarillo area (USD 13.65) and Kuala Lumpur’s Cyberjaya Office Market (USD 11.55) in office rents. 

 

 SKYCRAPER INDEX

 

· Mumbai ranks 6th on the Skyscrapper Index growth in six months to    Q2 2017

· Prime office rents in the upper floors of high rises in Mumbai see 1.8% growth, among the top six international rent appreciating markets

· India’s financial capital pips iconic global destinations such as London (0.0%), Hong Kong (1.1%), Tokyo (0.0%) and Dubai (0.0%)

  • Established office markets such as Singapore (-0.9%) and Kuala Lumpur (-0.8%) see negative 

 

 

 WHAT USD 100 MN COULD BUY?

 

 

  • More than half a million sq.ft of prime office space in Bengaluru, the highest in the world
  • Delhi emerged as the most expensive office market in India on the ‘What USD 100 mn could buy?’ index followed by Mumbai

 

TECH DISTRICT

 

  • Bengaluru’s Whitefield is the most affordable tech district among 29 global tech hubs in the world. 
  • Ranking 25th on the Tech Districts Index, Gurugram’s Cyber City (USD 20.40) beats Madrid’s Julian Camarillo area (USD 13.65) and Kuala Lumpur’s Cyberjaya Office Market (USD 11.55) in office rents. 

 

EMPLOYMENT AND PROPERTY COST INDEX

 

  • · Bengaluru emerged as the most valued destination on the Employment and Property Cost Index with total cost (salary + property) of USD 1,264,000

Table: Cost to a firm (salary and property costs) of employing 100 people in a City (US$ per annum)

 

 

HOW RISING INCOMES SPENDS WOULD INFLUENCE THE SHAPE AND CONTENT OF URBAN ENVIROMENTS

  • Bengaluru and Mumbai top the chart among 10 future cities in terms of eating out spends

Source: Oxford Economics Knight Frank Global Cities: The 2018 Report

 

  • Bengaluru and Mumbai feature among the top 5 future cities in terms of households with significant incomes 

Source: Oxford Economics Knight Frank Global Cities: The 2018 Report

 

Shishir Baijal, Chairman and Managing Director, Knight Frank India, said, “The Global Cities: The 2018 Report offers a bird’s-eye view into the future of the most state-of-the-art world cities. Our spaces are being redefined. And, one of the most disruptive facets of the change in spaces where we work, live and the overall urban ecosystem would be acquisition of talent.  Organisations would have to thoughtfully handpick global cities, zoom into smart office locations within them and tastefully shape these spaces in sync with the fascinations of the crème-de-la-crème workforce making the world work today. And, it is needless to state that the evolution would be driven by technology and smart intelligence.”

 

According to Dr. Samantak Das, Chief Economist & National Director – Research, Knight Frank India, “Desires of the talent pool and rising disposable incomes are set to shape our urban environments in the near future. Global cities that are aspirational and successful in encapsulating an inherent wow factor are set to see the most dramatic transformation. We have already seen glimpses of the transformation with a shift in the expectations of mainstream occupiers. Today we see that the office space expectations of mainstream occupiers resembling those of niche sections such as the Start-up fraternity or the Googles of the world. The global trend holds true for select Indian cities such as Bengaluru and Mumbai.”

 

Viral Desai, National Director, Occupier Solutions GroupKnight Frank India, added, “India’s office market witnessed a stellar run in 2016 as compared to the recent past. It is also a fairly accepted fact that India is home to some of the most affordable Central Business Districts in the world. The findings of the Global Cities: The 2018 Report reinstates the fact. Bengaluru’s Whitefield is a case in point. Despite the influence of global headwinds on mainstream occupiers, emerging trends such as Co-working space providers have continued to whip up demand in the supply-deprived market.” 

 

Written by The Realty Paper


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