India office market has shown a significant growth with an annual absorption of 43 million sq. ft. which is 9 per cent higher than the last year. With this, the country’s office stock surpassed a milestone of 500 million sq. ft. mark, reported by CBRE India in its India Office MarketView Report Q4 2016.
Despite global uncertainty, India has managed to perform well in last two years with a record absorption level. Indian government’s initiative of change in policy is going to bring more transparency into the sector that may result enhancing consumer and boosting investor confidence, according to Anshuman Magazine, Chairman – India & South East Asia, CBRE.
Bangalore is leading the India’s office market with high leasing activity. There is a drastic growth in office supply rate in Mumbai and Kolkata. In Mumbai, maximum activities are observed in Vikhroli, Goregaon, Malad and Airoli whereas Salt Lake V and Rajarhat are leading in lease activity in Kolkata. Also in last two years, Gurgaon has been most preferable location for office leasing in Delhi-NCR with high small-medium sized transactions (10,000 – 50,000 sq. ft.).
Ram Chandnani, MD – Advisory & Transaction Services at CBRE South Asia, is hopeful that this significant growth is likely to continue in 2017 for a few certain reasons. Firstly, regulatory clearance in important locations opens up an opportunity to enhance the leasing activity. The developers are ready to provide medium to large sized office spaces fulfilling the demands from many occupiers but since the availability is limited, the developers can prioritize their effort 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,” adds he.
The government’s recent policy initiatives – such as RERA and REITs – and demonetization move are going to give a good result with formalization and regulation of the sector that will help boost investment flows into the commercial real estate sector in coming months.
Source: World Property Journal