Office demand hits all-time high in India

Mumbai: The demand for office space witnessed an all-time high in terms of annual absorption in 2016 at 43 million square feet, which is nine per cent higher than yearago’s figure.

According to real estate consulting firm CBRE India Pvt. Ltd’s latest India Office MarketView Report for Q4 2016, the government’s policy initiatives through the Real Estate Regulation Act (RERA) and the Real Estate Investment Trust (REIT) have boosted the demand.

It said the impact of the recent demonetisation drive are likely to result in the formalisation and regulation of the sector. “The supply addition during the year touched 35 million sq. ft. with India’s office stock reaching a milestone of over 0.5 billion sq. ft. (as of Q4 2016) - higher than several East Asian economies,” the report said.

Mumbai saw the highest supply at 23  per cent in 2016 compared to 9 per cent in 2015 followed by Bengaluru 23 per cent  (32 per cent) and Pune and Chennai at 8  per cent.

Hyderabad saw office demand rise by 18 per cent from 15 per cent in 2015, and witnessed a steep rise in occupier demand, with absorption more than doubling to cross 6 million sq. ft. during 2016.

According to the report, more than 80 per cent of leasing activity was concentrated in the IT corridor.