Office space absorption to reach 132mn sq ft by 2017
With
the economy expecting more stability in the post- election phase, the
trend might also pick pace in Mumbai’s established market, says a report.
Mumbai Bullish on the revival of the economy after general elections,
real estate consultancy firm Cushman & Wakefield expects nearly 132
million sq ft of office space, across the eight major metros, to get
absorbed by 2017.
However, the report said the current year will
see a 26 per cent fall in office space absorption to around 22.5 million
sq ft over the past year due to the ongoing slump in the economy.
The supply of office space between 2013 and 2017 in the top eight
cities- Delhi- NCR, Mumbai, Bangalore, Chennai, Hyderabad, Ahmadabad,
Kolkata, and Pune is expected to be around 143 million sq ft.
Of
this 143 million sq ft, around 90 million sq ft are currently under
various stages of construction and is expected to get completed by 2015,
the report said.
" The office market is expected to remain
attractive for occupiers with steady increase in absorption after a
trend of decline in 2013.
" With the economy expecting more
stability in the post- election phase from 2015, the absorption trend is
also expected to pick pace especially in established markets of
Bangalore, Mumbai and Delhi- NCR," Cushman & Wakefield executive
managing director for South Asia Sanjay Dutt said.
The report
said the absorption of office space will decline in 2013 over 2012,
mainly due to the current economic slowdown, which has made many
companies defer their leasing requirements.
According to the
report, office space absorption including top eight cities is expected
to be over 22.5 million sq ft in 2013, a decline of around 26 per cent
over 2012.
However, going forward the trend in absorption is
expected to pick up at a steady pace with 2015 with an estimated
absorption of 28 million sq ft.
Dutt said that the commercial
office sector has seen substantial deferment of supply in the recent
times due to slack in demand and delays in regulatory clearances.
" Similar trend is expected to continue in the next few years owing to
issues such as demand from occupiers as well as funding issues that
developers have been facing," he added.
However, growth is
expected to set in from the second half of 2014 when an increase in
leasing activities both on account of entry of new companies into the
country, expansion of existing companies and indeed relocation and
consolidation activities that are expected to continue, Dutt said. - PTI
Source : The Free Press
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