Indian commercial real estate segment has recorded a robust growth in the second quarter of 2018. As per a recent report, office space take-up touched 12.6 million sq ft in this period and the trend is expected to continue over the next three years.
As per a recent report by Colliers Research, a total of 12.6 million sq. ft of office space was acquired with Bengaluru continuing to be the biggest contributor with 34 percent share of absorption. Bengaluru was followed by National Capital Region (NCR) which has 28 percent share of absorption followed by Mumbai at 14 percent, Hyderabad, Chennai at 8 percent each, Pune at 6 percent, and Kolkata at 2 percent.
“With the Indian GDP forecasted to grow at above 7% annually over 2018-2022, primarily led by cities such as Bengaluru and Hyderabad, “ Money Control quoted Ritesh Sachdev, Senior Executive Director, Occupier Services at Colliers International India, as saying. “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.”
Similarly, institutional investment in commercial assets also showed an upward trend with investors continuing to buy pre-leased and buildings near completion, as per the report. While Indiabulls fund reportedly bought Trivium, a multi-phase commercial space in Hyderabad, Blackstone LP acquired One Indiabulls Park and Ascendas agreed to buy two towers in the QPark technology park in Navi Mumbai.
The report further indicated the rise in popularity of co-working spaces with 7% share of leasing in H1 2018. This trend is expected to expand manifold in cities such as Mumbai, Bengaluru, and NCR owing to cost-effectiveness and flexibility, the increasing uncertainty among occupiers regarding their future headcount.
Talking about the performance of commercial real estate in Delhi-NCR, the maximum absorption was seen in Gurugram with gross office uptake at 2 million sq ft showing a 111 percent year-on-year jump. Maximum space was occupied by tech companies followed by banking, finance and insurance companies.