Office spaces record 43 million sq ft absorption in 2016

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The year 2016 might have seen some slowdown in real estate sector, but that has not impacted the demand and absorption of office spaces. If the reports of a private research firm are to be believed, approximately 43 million square feet of office spaces were leased in 2016 only, which shows 9% growth from the year 2015.

Bangalore and the National Capital Region (NCR) were among the most dominating regions grabbing 47% share. Mumbai and Hyderabad witnessed an increase in space take-up, accounting for a share of 14% each in leasing activity in 2016.

Hyderabad witnessed a steep rise in occupier demand, with absorption crossing 6 million sq ft during 2016.

In the year 2016 only, around 35 million sq ft of new office space was added, taking the India’s total office stock to over 0.5 billion sq ft till 2016 end. Mumbai and Bangalore accounted for almost half of the annual supply addition.

The commercial real estate market in India has managed to perform well despite ups and downs in real estate. India continues to show positive movement, despite global uncertainties. Policy initiatives undertaken by the government in the recent past is expected to bring transparency into the sector, which is a much-needed step towards enhancing consumer and investor confidence.

The last quarter of 2016 touched about 13.9 million square feet of office demand, registering a 20% growth over the September quarter. Leasing during the quarter was mainly led by Bangalore and Delhi NCR, accounting for more than 50% of the total traction, followed by Pune and Mumbai.

IT/ITeS firms continue to lead office transaction activity which account for about 50% of the transaction activity during the last quarter. Other sectors such as engineering and manufacturing, BFSI and research and consulting were also significant contributors, collectively accounting for about 28% of the quarterly leasing activity.

Small to medium sized transactions of sizes under 50,000 sq ft remained the preferred format of occupation for companies.

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Source: ET Realty

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