Bengaluru continues to outperform with an absorption of 10 million sq ft YTD, followed by Gurgaon, Pune, Hyderabad and Chennai.

The year-on-year (YoY) rental growth continued to surge in several micro-markets across India, particularly in cities like Bengaluru, Pune and Gurgaon.

According to Colliers Research, the top eight office micro-markets that witnessed the highest rental growth in Q3 2017 are as follows:

CBD, Bengaluru: Due to its strategic location, proximity to prime residential areas and limited supply, Central Business Districts (CBDs) like MG Road, Vittal Mallaya Road continue to rein as preferred micro-markets among occupiers, thus recording a YoY rental growth of 16.7 percent, the maximum among all city micro-markets.

Golf Course Road, Gurgaon: About 30 percent of the total leasing volume was concentrated here. It remains a preferred choice for premium occupiers, especially due to its enhanced metro connectivity, thus leading to 14.8 percent YoY rental growth.

Baner, Pune: Although Baner is one of the suburban commercial markets in Pune, a growing demand from occupiers and minimal supply have led to a rental growth of 10.9 percent YoY basis.

OMR Pre-Toll, Chennai: The IT-ITeS destination of Chennai, the OMR Pre-Toll micro-market, comprising Taramani, MGR Salai, Kandanchavadi, Perungudi locations witnessed rental growth of 11 percent YoY.

Hadapsar/Fursungim, Pune: The commercial realty market here witnessed 10.2 percent YoY rental growth. Proximity to prime, affordable residential areas and presence of Magarpatta City have elevated the prominence of this micro-market.

DLF Cyber City, Gurgaon: As an established IT hub in Gurgaon, DLF Cyber City has continued to draw tenants due to its locational advantages. Continued occupier preference and low vacancy rates in this micro-market pushed the average rents by 9.5 percent on a YoY basis.

SBD, Hyderabad: The office market performance in Hyderabad continues to be intense in the Secondary Business District (SBD) and about 80 per cent of the total leasing volume in Q3 2017 is concentrated in this micromarket.

Hosur Road, Bengaluru: This micro-market is connected to many prime residential areas and is dominated by retail and F&B outlets. With no new upcoming supply and persistent demand by the old tenants, there has been a 7.7 percent YoY increase.