Office Space Absorption Rose 54 Percent In First Half Of 2018: JLL-CII Report
Companies leased a total of 24 million square feet of office space—8 million sqft more than in the year-ago period.
Corporate leasing activity rose by nearly 54 percent in the first half of 2018 compared with the year-ago period, according to a report by the real-estate consultancy JLL India and the Confederation of Indian Industry.
The report, titled “India’s Real Estate Milestones – A 20-year narrative”, which was released in Mumbai today, said that companies leased a total of 24 million square feet of office space—8 million sqft more than in the year-ago period.
The report attributes it to the demand from co-working spaces, large technology and financial services companies and global in-house data centres. The trend, the report said, was most evident in Bengaluru and the National Capital Region—which contributed 26 percent each to gross leasing volumes.
The net office-space absorption in India for 2018 will be around 36-37 million sq ft, said Ramesh Nair, chief executive officer and country head of JLL India. “All aspects of the real-estate sector—residential, retail, office and investments—have seen a healthy increase in demand,” he said, adding: “…the significant quantum of this rise… (is) ushering a revival of the sector backed by strong fundamentals.”
Residential space absorption rose 25 percent year-on-year, the report said. “The consensus among buyers is that the markets have bottomed out and capital values are expected to move northward,” said Nair. “This can be attributed to the growth in residential demand.”
Markets like Bengaluru, Hyderabad, Pune and Chennai drove growth due to job creation in these regions, he said.
At 75 percent, the retail sector recorded the maximum growth in space absorption year-on-year to 1.9 million sq ft, the report said. The sector, the report said, has witnessed growth in leasing by both international and domestic brands.
Key Highlights Of The Report:
- Funding by institutional investors: $3,616 million (Rs 24,011 crore).
- Growth in funding by institutional investors during 2013–17: $20,971 million, at a CAGR of 63 percent.
- Investments in IT and commercial sectors in same period: nearly $2,000 million (Rs 13,151 crore).