Office market saw 12.6 million sq ft absorption in Q2

Indian commercial real estate market recorded a robust growth with total space absorption of 12.6 million sq ft in the second quarter of 2018 as per Colliers International.
Bengaluru (Bangalore) continued to account for the highest share of absorption at 34% in Q2, followed by the National Capital Region (NCR) at 28%, Mumbai at 14%, Hyderabad and Chennai at 8% each, Pune at 6%, and Kolkata at 2%.

“With the Indian GDP forecasted to grow at above 7% annually over 2018-2022, primarily led by cities such as Bengaluru and Hyderabad. This economic growth should drive demand for Grade A office space and increase institutional investments in premium commercial office assets in the next three years”, said Ritesh Sachdev, Senior Executive Director, Occupier Services at Colliers International India.

The overall absorption for H1 2018 was recorded at 24 million sq ft. “Use of coworking space is becoming a popular trend, with 7% share of leasing in H1 2018. Besides its cost-effectiveness and flexibility, the increasing uncertainty among occupiers regarding their future headcount growth is driving the demand of coworking spaces”, mentioned the report .

Colliers expects the coworking concept to continue expanding notably in cities such as Mumbai, Bengaluru and NCR.

Institutional investment in commercial assets also remained solid with investors continuing to buy pre-leased and buildings near completion.

In Q2, the Indiabulls fund was reported as having bought Trivium, a 1.0 million sq ft (0.1 million sq m) multi-phase commercial development in Hyderabad. Blackstone LP acquired One Indiabulls Park (2.4 million sq ft or 0.22 million sq m); and Ascendas agreed to buy two towers in the QPark technology park in Navi Mumbai.