The inventory of commercial office space is almost down to half in the last six years, an indication of the regular demand from the corporates. Not only is the office space being taken up really fast, pre-leasing activity is also at an all-time high.
“India remains a major outsourcing destination with annual office absorption continuing to be robust, led by a growing number of mid-sized and smaller transactions. Earlier, there was lot of speculative office space being constructed but that stopped post the economic slowdown of 2008,“ said Anshuman Magazine, CMD of property consultancy CBRE.
As per CBRE, office space vacancy level that was at its peak in 2012 with 23% is now at 13% across top cities, mainly driven by demand from ITeS and BFSI sectors. Annual absorption of office space also continues to be quite healthy, led by a growing number of mid-sized and smaller transactions, with the segment registering 18 mln sqft of absorption in the first half of 2017.
Another report by global property expert Cushman & Wakefield showed that Bengaluru led the pack, with a share of about 27% at 4.8 mln sqft. Hyderabad was second on the list at 3.2 mln sqft.
“Almost 30% of the total net absorption for YTD 2017 took place in the third quarter of the year and going by the previous years' trends, another 30-35% is expected to be recorded in the last quarter of the year,“ said Anshul Jain, managing director, India, Cushman & Wakefield.
By contrast, residential real estate is beset with challenges of high inventory, lower consumer interest and sales. The second quarter of 2017 marked a record low for units launched, with 20,000 new units. Unsold residential units were at 4.2 lakh and recorded a fall after 30 months, showed data from Anarock Property Consultants.