Demand for commercial office space across the seven major cities in India is estimated at around 160 mn sq ft by 2014, a latest study by real-estate services firm Cushman and Wakefield Research (CWR) said. The quantum of demand will mainly be concentrated in the metropolitan centres of Bangalore, Mumbai and National Capital Region of Delhi.
Significantly, in all the metros except Bengaluru, supply will outstrip demand by 2014 as more office space will be created by then. As per CWR projections, the demand for office space in NCR Delhi will be 30 mn sq ft by 2014 while the actual availability is expected to be 40 mn sq ft.
In Mumbai, the supply (about 50 mn sq ft) will far outstrip the demand (30 mn sq ft) while in Chennai the supply by 2014 will reached 32 mn sq ft as against demand of 22 mn sq ft. In Kolkata, however, both the supply and the demand will be even at 10 mn sq ft, the study pointed out. Bengaluru will have a shortfall in office space availability as the demand (35 mn sq ft) is projected to be more than the supply (30 mn sq ft) during the period.
The study was commissioned by the Information Technology and Communications Department of Andhra Pradesh government and the CWR report was released last week. In the next four years (2011 to 2014), the demand for commercial space is estimated to be approximately 160 mn sq ft with a Compound Annual Growth Rate of over 6 per cent.
In the same period, Hyderabad is expected to see a CAGR of 13 per cent with an estimated cumulative demand for office space of approximately 18.5 mn sq ft,” the CWR report points out. This will make Hyderabad the second highest growth centre for office space demand in a period of four years.
“Considering the cost of commercial real estate and the projected rental appreciation in the coming years, Hyderabad is one of the potential options for the corporate sector to operate and expand,” the report adds. The residential segment has been most active across the country with the smaller towns and cities witnessing heightened construction activity.
Growing at a CAGR of 20 per cent by 2014, the pan-India cumulative residential demand is estimated to stand at 3.67 mn units with the top seven cities accounting for nearly 60 per cent of the total demand for housing, CWR says.
“As the residential demand is usually seen to follow economic activities, it is expected that the demand will out strip supply in the established commercial centres. However, availability of suitable land and its rising cost in the major cities makes the exercise challenging,” the report points out.
