Commercial
Real Estate News
India's Office Market Hits 500 Million Square Foot Mark

India's Office Market Hits 500 Million Square Foot Mark


Office Absorption in India Hits Record Levels

According to CBRE India's latest India Office MarketView Report Q4 2016, India's office market witnessed an all time high annual absorption of over 43 million square feet in 2016, registering a growth of 9% on a year-over-year basis. New office supply during 2016 touched 35 million square feet, with India's office stock reaching a milestone of over 0.5 billion square feet (as of Q4 2016) - higher than several East Asian economies.

Commenting on the findings of the report, Mr. Anshuman Magazine, Chairman - India & South East Asia, CBRE said, "The commercial real estate market in India has been performing well for the past two years. This is evident in the record absorption levels witnessed in 2016. India continues to show positive movement, despite global uncertainties. Policy initiatives undertaken by the Government in the recent past is expected to bring transparency into the sector, which is a much needed step towards enhancing consumer and investor confidence."

India Office Market Highlights (Q4, 2016)

National Capital Region
  • Quarterly leasing almost doubled with Gurgaon continuing to lead leasing activity in the NCR, constituting a share of 61%
  • Rents across micro-markets remained stable with the exception of DLF Cyber City.
  • Leasing activity occurred mostly in the form of small-medium sized transactions (10,000 - 50,000 sq. ft.)
Mumbai
  • Transaction activity was largely stable, as compared to the previous quarter
  • Leasing activity in Peripheral markets of Vikhroli, Goregaon, Malad and Airoli accounted for almost 60% of office take up in the city
  • Rental and capital values continued to remain stable across most micro-markets
Hyderabad
  • Hyderabad, witnessed a steep rise in occupier demand, with absorption more than doubling to cross 6 million sq. ft. during 2016
  • More than 80% leasing activity was concentrated in the IT Corridor
  • About 2-7% rental increase reported in CBD, IT Corridor and Extended IT Corridor
Bangalore
  • Rise in quarterly demand, mainly in ORR, PBD and NBD
  • Supply completion also largely concentrated in ORR, PBD and NBD;
  • Continued rental escalation across most micro-markets
Chennai
  • Strong leasing activity reported in 2016, OMR Zone I and OMR Zone II contributed to over 60% of the leasing activity
  • Rentals continued to strengthen across major micro-markets; supply addition restricted to small-sized IT/ non-IT developments
Pune
  • Small-to-medium sized transactions drove demand for office space
  • Supply completion in the form of small to medium-sized non-IT and SEZ developments
  • Rental values grew in the IT and non-IT segments across most micro-markets
Kolkata
  • PBD micro-markets of Salt Lake V and Rajarhat continued to lead leasing activity
  • Rental values remained stable across all micro-markets
  • Supply addition mainly in SBD and PBD

india-office-market-2017.jpg"Commercial activity and occupier demand is expected to remain steady in the coming months, backed by corporates looking to expand/consolidate operations. Regulatory clearances in key locations are also likely to boost leasing activity in the coming quarters. Occupier enquiries for medium to large sized office spaces are expected to be closed in forthcoming quarters, adding to the transaction momentum. Due to the limited availability of ready to move in Grade A supply, occupiers with medium and large size requirements will focus on pre-commitments in under construction/built-to-suit developments across key micro-markets in the leading cities in the country. Occupiers, while expanding their footprint, are likely to keep a strong check on city infrastructure and focus on space utilization ratios and innovation in workplace strategies", said Mr. Ram Chandnani, Managing Director - Advisory & Transaction Services, CBRE South Asia.

On the supply front, a significant quantum of space is expected to be released in the decentralized locations of leading cities over the next few quarters. Most of this supply is concentrated in peripheral locations of leading cities, which is likely to attract enhanced enquiries and strong pre-commitment activity in the coming months.  The Government's policy initiatives (RERA and REIT), coupled with the impact of the recent demonetization drive is likely to result in the formalization and regulation of the sector. This in turn, is expected to boost transparency and investment flows into the commercial real estate sector, going forward.


Sponsored by

Comment with Facebook


Copyright 2010 - 2017 WORLD PROPERTY JOURNAL, INC. All Rights Reserved.
Advertisement
News Search
Go


Luxury Property Spotlight

Reader Poll

Advertisement
Featured International Listings
×
WORLD PROPERTY JOURNAL
 
Free News Alerts
 

Sign up now to receive the latest local & global real estate news in your inbox.

GO