Office absorption: Chennai, 6 other top markets to record all-time high

Chennai: The Indian commercial real estate market is expeted to result in 16 per cent on-year growth, at over 33 million sq ft, in net office absorption, a report said.

In 2019, the top seven markets of Delhi-NCR, Mumbai, Bengaluru, Chennai, Hyderabad, Pune and Kolkata together are forecast to record an all-time high net absorption of over 37 million sq ft, the level achieved in 2011, said a JLL India report.

These markets are expected to witness net absorption of over 76 million sq ft over the next two years.

On the supply side, JLL India expects around 126 million sq ft supply over the next three years, based on the launch of new projects in several markets.

During the first nine months ending September, net commercial space absorption grew 18 per cent year-on-year (y-o-y) to 23.4 million sq ft.

The double-digit growth was driven by strong economic fundamentals, demand for good quality office space, institutional investments in commercial office assets apart from the co-working space catching up in key markets.

According to the report, Bengaluru saw highest absorption of office space at 7.9 million sq ft in the first nine months of the year. Mumbai came next with 4.2 million sq ft and Delhi-NCR with four million sq ft came third. Together, the top three markets contributed nearly 70 per cent of the absorption across India.

In percentage growth terms, Chennai witnessed a 92 per cent increase in office space absorption at 2.3 million sq ft. It was followed by Pune, which saw 50 per cent on-year growth at 2.1 million sq ft, JLL data shows.

“With an 8.2 per cent GDP growth in April-June quarter of current fiscal and India’s position improving considerably in Ease of Doing Business 2018, the Indian economy is on strong growth path. This will have a positive impact on the real estate sector, especially the demand in commercial office segment,” said CEO and country head, JLL India, Ramesh Nair.

NT Bureau