Indian office market is likely to touch 39 mln sqft of net absorption by 2020 on the back of a strong pipeline and lower vacancy across top commercial markets in the country, as per a recent study by JLL India.
According to the study, 2017 saw the net absorption declining marginally to 28.7 mln sqft, while the current year should be closing at 33.3 mln sqft.
“Last few years have seen exponential growth of co-working as a concept across major office markets in India. The concentration of co-working spaces is expected to intensify further in Bengaluru, Mumbai and Gurgaon due to the availability of infrastructure and a vibrant start-up ecosystem,” said Ramesh Nair, CEO and country head, JLL India.
The study further mentioned that of the total non-IT/ITeS space absorbed by different sectors, substantial space has been taken up by the emerging co-working sector as an increasing number of office occupiers/tenants have started considering shared space as a preferred option for office operations.
In fact, share of co-working sector in total office leasing more than doubled to nearly 10% in the first nine months of 2018 compared to 4% year ago. “In times to come, some tier II and III markets are also expected to witness emergence of co-working hubs,” said Nair.
According to the report, the office market pan-India is likely to see completions ranging from 38-45 mln sqft every year till 2020 indicating a strong supply pipeline. Vacancy also declined by 30 bps to 13.7% in July – September quarter of this year compared with 14% recorded in the preceding quarter due to higher demand and lower completions recorded across India.