India Office MarketView Report

CBRE India, India's leading Real Estate Consulting firm, announced the findings of its latest India Office MarketView Report – Q4 2016. As per the findings, India's office market witnessed an ALL TIME HIGH annual absorption of over 43 million sq. ft. in 2016, registering a growth of 9% on a y-o-y basis. Supply addition during the year touched 35 million sq. ft. with India's office stock reaching a milestone of over 0.5 billion sq. ft. (as of Q4 2016) - higher than several East Asian economies.

Realty Bytes: 2016 at a glance

  • Bangalore and NCR dominate leasing on an annual basis with 47% share
  • IT/ITeS firms continue to lead office transaction activity; account for about 50% of the transaction activity during the last quarter
  • Hyderabad witnessed a steep rise in occupier demand, with absorption more than doubling to cross 6 million sq. ft.
  • Small to medium sized transactions (under 50,000 sq. ft.) remained the preferred format of occupation
  • The share of domestic corporates in transaction activity grew from 41% in 2015 to 43% in 2016
  • Mumbai and Bangalore accounted for almost half of the annual supply addition

2017: The Way Forward

  • PE players to continue to invest sizable monies in commercial real estate
  • Overall take-up expected to remain strong in 2017; REITs to have a positive impact.
  • Corporate occupiers likely to remain cost sensitive, consider adoption of workplace strategies for efficient space-utilization
  • Infrastructure improvements to be a critical factor for occupier location strategy
  • Pre-let activity to continue in quality, cost-effective projects that are nearing completion
  • Rental divergence expected between core (tapering growth) and peripheral micro-markets (growth stable/rise)
  • Tenants willing to pre-commit to have an upper-hand in rental negotiations

City Highlights - Q4, 2016

  • National Capital Region
    • Quarterly leasing almost doubled with Gurgaon continuing to lead leasing activity in the NCR, constituting a share of 61%
    • Rents across micro-markets remained stable with the exception of DLF Cyber City.
    • Leasing activity occurred mostly in the form of small-medium sized transactions (10,000 – 50,000 sq. ft.)
  • Mumbai
    • Transaction activity was largely stable, as compared to the previous quarter
    • Leasing activity in Peripheral markets of Vikhroli, Goregaon, Malad and Airoli accounted for almost 60% of office take up in the city
    • Rental and capital values continued to remain stable across most micro-markets
  • Hyderabad
    • Hyderabad, witnessed a steep rise in occupier demand, with absorption more than doubling to cross 6 million sq. ft. during 2016
    • More than 80% leasing activity was concentrated in the IT Corridor
    • About 2-7% rental increase reported in CBD, IT Corridor and Extended IT Corridor
  • Bangalore
    • Rise in quarterly demand, mainly in ORR, PBD and NBD
    • Supply completion also largely concentrated in ORR, PBD and NBD;
    • Continued rental escalation across most micro-markets
  • Chennai
    • Strong leasing activity reported in 2016, OMR Zone I and OMR Zone II contributed to over 60% of the leasing activity
    • Rentals continued to strengthen across major micro-markets; supply addition restricted to small-sized IT/ non-IT developments
  • Pune
    • Small-to-medium sized transactions drove demand for office space
    • Supply completion in the form of small to medium-sized non-IT and SEZ developments
    • Rental values grew in the IT and non-IT segments across most micro-markets
  • Kolkata
    • PBD micro-markets of Salt Lake V and Rajarhat continued to lead leasing activity
    • Rental values remained stable across all micro-markets
    • Supply addition mainly in SBD and PBD
Commenting on the findings of the report, Mr. Anshuman Magazine, Chairman –India & South East Asia, CBRE said, "The commercial real estate market in India has been performing well for the past two years. This is evident in the record absorption levels witnessed in 2016. 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."

City Office Supply (%)
2016 2015
Delhi - NCR 8% 26%
Mumbai 23% 9%
Bangalore 23% 32%
Pune 8% 9%
Chennai 8% 7%
Hyderabad 17% 15%
Kolkata 13% 1%
"Commercial activity and occupier demand is expected to remain steady in the coming months, backed by corporates looking to expand/consolidate operations. Regulatory clearances in key locations are also likely to boost leasing activity in the coming quarters. Occupier enquiries for medium to large sized office spaces are expected to be closed in forthcoming quarters, adding to the transaction momentum. Due to the limited availability of ready to move in Grade A supply, occupiers with medium and large size requirements will focus on pre-commitments in under construction/built-to-suit developments across key micro-markets in the leading cities in the country. Occupiers, while expanding their footprint, are likely to keep a strong check on city infrastructure and focus on space utilization ratios and innovation in workplace strategies." said Mr. Ram Chandnani, Managing Director – Advisory & Transaction Services, CBRE South Asia Pvt. Ltd.

On the supply front, a significant quantum of space is expected to be released in the decentralized locations of leading cities over the next few quarters. Most of this supply is concentrated in peripheral locations of leading cities, which is likely to attract enhanced enquiries and strong pre-commitment activity in the coming months. The Government's policy initiatives (RERA and REIT), coupled with the impact of the recent demonetization drive is likely to result in the formalization and regulation of the sector. This in turn, is expected to boost transparency and investment flows into the commercial real estate sector, going forward.
Click Here
To Know More / Contact The Manufacturer
Please fill in your details, we will contact you as soon as possible
Choose Title from the listPlease let us know your name.
Please let us know your Designation.
Invalid Input
Please let us know your email address.
Please let us know your City.
Please let us know your Contact Number.
Please brief your query.
Our other value-added services:

To receive updates through e-mail on Products, New Technologies & Equipment, please select the Product Category(s) you are interested in and click 'Submit'. This will help you save time plus you will get the best price quotations from many manufacturers, which you can then evaluate and negotiate.

Equipment & Machinery
Invalid Input
Building Products
Invalid Input

Construction Industry - Economic Disruptions, Growth Prospects, and the Way Forward

Industry stalwarts from the Construction industry – developers, contractors, consultants, manufacturers, service providers, etc. share their views on the challenges that their businesses are facing due to the nation-wide lockdown Read More ...

Reassessing India’s Infrastructure Needs & Demand

Clearing the clutter in the infrastructure space, clarity in policy by the government, and a more efficient legal system to expedite dispute resolution are the key elements for a vibrant infrastructure sector of Read More ...

Future of Indian Real Estate Market Post-COVID-19 Crisis

India’s real estate market has grown tremendously in the past decade. Robust occupier interest, the rise of organised real estate developers, and the entry of institutional capital have acted as catalysts for the growth Read More ...

Deconstructing a slump

The extended lockdown to stem the Covid-19 pandemic has compounded India’s growth woes. Along with external risks such as weak global demand, supply disruptions, and global financial shocks, the economy now faces factory Read More ...

Tectonic Shift in Realty Business Operations

The COVID-19 pandemic has triggered the biggest ever crisis for the real estate sector. This has dealt a crippling blow to real estate marketing which will in turn change the dynamics of brokerage business in the days to come Read More ...

Best Practices in Delivery of EPC/E&C Projects

The economic growth in India in recent years and the clients’ increasing preference for a single-point responsibility under design-build, for their projects, have led to a surge in opportunities in public as well as private Read More ...

5 Technological Innovations Transforming E&C Sector

Precast construction techniques offer a high degree of modularity of designs and application of manufacturing principles for mass housing projects. The quality, safety, and speed of construction are greatly enhanced with precast Read More ...

Infra Development: The Way Forward

Although the Indian economy has been facing macro-economic ups and down due to global economic gloom, it has managed to remain stable, recording moderate growth rate consistently. Braving all the problems beyond its control, it has improved Read More ...

“Nal Se Jal” - SPML Infra Playing Key Role in Developing Water Infrastructure in India

SPML Infra Limited, India’s leading water management company will play a key role in the development of sustainable water infrastructure to realize the vision of “Nal Se Jal”. This ambitious scheme announced by the Finance Minister during Read More ...

Indian Aviation on a Growth Path

The Aviation Industry in India has emerged as one of the fastest growing industries in the country, especially so during the last three years. Introduction of low-cost carriers, FDI in domestic airlines, advanced information technologies Read More ...

Redefining Urbanity with international transport system

Creative Group presents a new vision for Chandni Chowk (a very congested area in Old Delhi) with re-planned interconnectivity, intermodality, and green spaces, that release the current stress above the ground and create opportunities to restore Read More ...

Rapid Transit System in India Making inroads

To quote Mark Walport, “Industrialisation, Mass Transit, and the Internet are technological revolutions that have reshaped lives, nations, and the planet.” The Indian economy is poised to grow at over 7% in the coming years, placing it Read More ...

Attracting Private Investments to Boost Highway Growth in India

Ever since India set out on a path of economic liberalization in 1991, the policymakers for almost three decades remained focused on developing infrastructure to commensurate with the economic growth of the nation. But the task was humongous Read More ...

Transport Infrastructure in Focus

Transport Infrastructure to continue as a key focus area for new Government with massive capital outlay of up to ₹30 trillion expected over next five years. Construction companies are likely to be the major beneficiaries and will witness Read More ...

Real Estate Market Outlook 2019

India continues to retain its position as the world's fastest growing major economy on the back of improved investor confidence and better policy reforms. The IMF's database also suggested that India's contribution to world growth Read More ...

Infra Construction - Positives Outweigh Negatives

For a large part of the current up-cycle which started in CY2016, road work has largely been the biggest demand driver, followed by railways/metro.Notwithstanding the general slowdown in public/private infrastructure work Read More ...

New Building Material & Construction World

New Building Material & Construction World
MGS Architecture

Modern Green Structures & Architecture

Modern Green Structures & Architecture

Lifting & Specialized Transport

Lifting & Specialized Transport

Indian Infrastructure & Tenders Week

Indian Infrastructure & Tenders Week