Office space absorption jumps in first half of 2018

Office space absorption jumps in first half of 2018

A report titled ‘India’s Real Estate Milestones – A 20-year narrative’, which was brought out by the Confederation of Indian Industry (CII) and property consultancy JLL India said companies leased 8 million square feet more space in the first half of 2018.

Office space absorption jumped 58 per cent in the first half of this calendar year to 24-million square feet with cities like Mumbai, Bengaluru and Delhi-National Capital Region taking the lead. In other words, Companies leased around 8 million square feet more space as compared to same time last year. Overall absorption during the first half of 2017 stood at 15.18 million square feet in the commercial real estate space.

Momentum in the leasing activity was primarily driven by demand from large technology companies, co-working, financial services and global in-house data centres, which was a reflection of the current economic environment.

The first half of 2018 was significant in terms of sales velocity for the residential sector, which picked pace recording a rise of 25 per cent year-on-year (YoY). This can be attributed to two large factors, firstly returning buyers confidence on account of implementation of RERA in most states and stable capital values that have started to show an upward trend, the report says.

In the retail sector, net absorption in the first half of 2018 for retail space has seen a rise of over 75 percent YoY recording a total absorption of 1.9 million square feet (msf) in the first half of 2018. The retail market, which has been experiencing a new lease of life with investment interest returning to the market, has also seen a growth in leasing activities from both international and domestic brands.

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