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A significant surge in consumer spending during the festive season, positively impacting the retail sector across several key markets. Notably, Auckland, China, Hong Kong, Bangkok, and Bengaluru experienced notable growth as retail markets capitalised on the increased consumer activity, Colliers' Q4 2024 APAC Cap Rates report highlights.
In Bengaluru, the commercial supply was well behind uptake, resulting in lower vacancy, while Mumbai's office supply increased sixfold year-on-year but was still below the uptake in 2024, resulting in a strong market.
In Bengaluru, along the main business corridors, rental and capital rates for Grade A commercial offices witnessed significant upward movement. Outer Ring Road (ORR), North Bengaluru and Whitfield saw a higher volume of Grade A floorplate transactions due to availability and specifications, resulting in range-bound cap rates between 8.0 per cent - 8.5 per cent.
The commercial uptake in Mumbai has witnessed a strong YoY improvement in 2024, with the highest demand growth in the last quarter. However, the increased supply kept the rental increases in check except for certain micro-markets as more options became available.
"Further, Bengaluru has witnessed improved transaction volumes in organised retail, with rising capital values in high street areas attributed to increased consumer activity during the festival season, leading to higher revenue shares. In Mumbai, industrial transaction volume has been slightly lower on a YoY basis. However, the supply has increased in the market by 15 per cent in Mumbai. Based on this, cap rates have been stable in Q4 2024. CPI inflation jumped significantly to 5.22 per cent in December 2024, with the preceding 3-month average at 5.63 per cent. This increase in inflation is attributed to the significant growth in urban inflation from Q3 2024," said Ajay Sharma, Managing Director, Valuation Services, Colliers India.
