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In Q2, the Indian Office Market observes 12.6 million sq. ft. absorption

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Indian Office Market

Bengaluru accounted for 34% of office market absorption, followed by National Capital Region (NCR) at 28%, Mumbai at 14%, Hyderabad and Chennai at 8%, Pune at 6% and Kolkata at 2%.

The second quarter of 2018 saw a healthy growth in the Indian commercial real estate market. As per the Colliers International report, the market witnessed a 12.6 million sq.ft. of total space absorption.

Bengaluru ruled the roost with a total absorption rate of 34%, followed by National Capital Region (NCR) at 28%, Mumbai at 14%, Hyderabad and Chennai at 8%, Pune at 6% and Kolkata at 2%. Compared to the current rise, the absorption rate stood at 24 million sq ft. for the first half of 2018.

“With the Indian GDP forecasted to grow at over 7% annually over 2018-2022, primarily led by cities such as Bengaluru and Hyderabad. This economic growth should drive demand for Grade A office space and increase institutional investments in premium commercial office assets in the next three years”, said Ritesh Sachdev, Senior Executive Director, Occupier Services at Colliers International India.

The report noted that the use of coworking space is fast holding pace, becoming a trend which saw a 7% share of leasing in H1 2018. In addition to their flexibility and cost-effectiveness, the increasing demand for co-working spaces is also due to the uncertainty among occupiers regarding their future headcount.

The coworking concept will continue to expand in Indian cities of Mumbai, Bengaluru and NCR, states the top-tier global real estate services company.

Indiabulls fund was reported to have bought Trivium, a 1.0 million sq ft multi-phase commercial development in Hyderabad in Q2, 2018. Blackstone LP acquired One Indiabulls Park while Ascendas agreed to buy two towers in the QPark technology park in Navi Mumbai.

Institutional investment into commercial assets persisted to be strong, with investors continuing to buy pre-leased and buildings in their completion phase.

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