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The overall corporate space take-up of about nine million square feet in the October-December period of 2014 was the highest level seen in a quarter over the past three years, shows a study.
Powered by enhanced activity in corporate real estate transactions in Bengaluru (a 37 per cent increase over the year-ago period) and NCR (24 per cent growth), the total office space take-up during calendar year 2014 stood at a little more than 33 million sq ft, Anshuman Magazine, chairman & managing director of CBRE, said in a note issued on Monday.
The demand for commercial office space sustained through the year and take-up increased around 10 per cent over that in 2013, he said.
“The year also saw significant investor interest in completed and well-leased core commercial assets and information technology parks. The willingness to invest in India — especially of multinational organisations — indicates an increased confidence in the country’s growth story in general and the government in particular,” Magazine added.
The market for commercial properties has seen a revival of sorts in the past few quarters. According to HDFC Securities, the December quarter of 2013 recorded absorption of 10.1 million sq ft — 40 per cent higher than the previous quarter and 95 per cent more than a year ago. According to the brokerage, this was the first time quarterly absorption exceeded 10 million sq ft on a pan-Indian basis.
“With an improvement in corporate activity and better sentiment in the capital market, there are several deals in the pipeline that might drive absorption levels from calendar year 2015,” HDFC Securities analyst, Adhidev Chattopadhyay said in a recent report.
According to Magazine, all major cities have seen an increase in demand for office space. “While rationalised supply and increased focus on committing space in under-construction projects in Mumbai led to a drop in transaction activity, a subdued political climate in Hyderabad during the first half of 2014 contributed to a similar drop,” he said.
The office property market is expected to do well in 2015 as well. “The fundamentals are in place for the global economy to move ahead in 2015. There are signs of business conditions turning the corner, and there are hopes of better news ahead for India’s real estate sector. The factors most likely to further affect the real estate market positively are stronger economic growth, more relevant reforms, and lowering of interest rates,” Magazine said.
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