The quarter saw an approximately 26% increase in quarter-on-quarter total office space absorption across these prime locations
New Delhi, July 2, 2014: CBRE’s India Office Market View for Q2 2014 reports on the status
of investment-grade office spaces in the country’s leading cities. The quarter
saw an approximately 26% increase in quarter-on-quarter total office space
absorption across these prime locations, from a little more than 6 million sq.
ft. in Q1 2014 to nearly 8 million sq. ft. in Q2 2014—signaling the generation
of reasonable employment opportunities. New Grade A office space addition,
meanwhile, grew by 3% q-o-q across the seven leading cities, to stand at nearly
7 million sq. ft. in Q2 2014.
The following are the key points from the
Transaction activity improved on the back of
increased occupier activity. Most investment-grade office
markets saw an increase in absorption levels, with Bangalore, the Delhi
National Capital Region (NCR) and Pune attracting more than 70% of the total
office space requirements of corporate occupiers during the second quarter.
The IT/ITeS, banking/financial services,
manufacturing and pharmaceuticals sectors continued to drive demand for Grade A office space in Q2 2014 across the leading cities. These sectors are
likely to remain the prime demand drivers in the forthcoming quarters too.
Bangalore led new office space supply in the
second quarter. The IT City, together with Mumbai and Hyderabad,
contributed to more than 80% of the total corporate office supply completed across
the top seven cities during the quarter under review. Going forward, significant
office space is expected to reach completion in the decentralized locations of
Rental values exhibited mixed trends. Rental values in the CBDs of most leading cities remained stable during
Q2 2014, while appreciating
by around 5–6% in the core areas of MG Road/Residency Road in Bangalore owing to sustained occupier
interest. Meanwhile, rentals dipped by 2–4% in Mumbai’s Nariman Point,
Bandra–Kundra Complex BKC, Worli and Prabhadevi, mainly due to weak occupier
demand and existing vacancy pressures. Going forward, supply backlogs are
likely to pressurize rental values across most micro-markets in the short to
an Magazine, Chairman and Managing
Director of CBRE South Asia Pvt. Ltd., commented:
“The formation of a stable central government
has generated hope for growth and structural reforms in the country’s economy,
which is expected to provide the necessary growth for the realty sector.
Opening up new sectors for investment, while rejuvenating the manufacturing and
services sectors, is expected to help in resuscitating demand for corporate
office space in the forthcoming quarters.”
Neither CBRE nor its affiliated companies make any warranties or claims on the implied accuracy of the information contained herein.
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CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2016 revenue). The company has more than 75,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.