Chennai: The pandemic notwithstanding, office space deals witnessed significant growth at $3,102 million in 2020.
According to ‘India Real Estate Outlook – A Growth Cycle’ report launched by JLL, the total value of deals in 2019 stood at USD 5,431 million compared to USD 5034 million in 2020.
“Office market is on its road to recovery as it is likely to witness an increased number of new completions of close to 38 million square feet, while net absorption is likely to hover around 30 million square feet,” said Samantak Das, chief economist and head of Research, JLL India.
The report stressed that the REITs market has been the biggest catalyst to keep investment momentum up.
“Foreign investors looking for stable yield and regular returns, have been able to see the benefits of a good sponsor quality, track record, transparency and delivering predictable returns in the REITs market. Landlords owning income yielding core office assets have been forming strategies to list their assets through REITs. Listing of new REITs is expected to provide opportunities for institutional investors to build asset portfolios or co-invest with existing platforms before the IPO,” it said.
“Business activities resumed with the gradual opening of the economy in the third quarter of 2020 and the office market witnessed green shoots of recovery. Sentiments improved further in the last quarter of 2020 with the news of potential vaccine development, and the office market continued its recovery momentum,” it added.
“In 2021, we expect the IT/ITeS sector to remain the key occupier group while demand from emerging sectors such as e-commerce, manufacturing and healthcare is likely to increase further. With stable rental values and low vacancy levels, the office market in India will continue to be characterised by strong fundamentals in 2021,” it stated.