Office architecture in Indian cities has improved significantly during the last decade, in terms of aesthetics, sustainability, scale and amenities that it provides to the occupiers. There is a growing demand from occupiers towards better amenities at the workplace.
Leasing of prime office space across key cities in India witnessed an increase in the second quarter of 2012 with over 7 million sq.ft. of office space being absorbed across key cities.
Till the ‘90s and even early years of the last decade, commercial real estate was being built as just another asset class to be leased out to entrepreneurs who would start or expand business as and when required. Most office buildings were largely built in the central business districts of various cities, functioning primarily as the central node where most of the commercial activity of the city took place.
The absorption of office space continues its slide in the top cities, with exceptions in Mumbai, Kolkata and Ahmedabad, which are the only ones recording a rise in absorption levels, finds the real-estate consultancy firm Cushman and Wakefield.
ITES and BFSI continue to be primary demand drivers of office space in India in 2012, says DTZ Occupier Perspective: India Office Demand and Trends Survey 2011. It says Delhi NCR and Bengaluru preferred by IT/ITES while Mumbai is BFSI’s favourite. Tier II cities of Bhubaneswar, Chandigarh and Jaipur preferred by IT/ITES; Ahmedabad by BFSI’s favourite; Gurgaon is the preferred micro market in Delhi NCR.
With slowdown signs looming large over the Indian economy, the effect on the job market and its subsequent effect on office space is getting visible now.
The demand for office space in Chennai is expected to dip, with an expected slowdown in North American and European countries affecting the information technology sector.
Real estate stock of office premises in Mumbai has been going through a slump for the last 14 financial quarters.
An analysis of the recent revival of commercial real estate market in Mumbai shows that the Banking, Financial Services and Insurance (BFSI) sector has been primarily responsible for the huge uptake of office space.
Realty consultant CB Richard Ellis India said on Wednesday, July 20, leasing activities for office spaces in major cities during April-June period has increased by over 33% to eight million sq ft compared to the previous quarter.