Real Estate Market
Update Q3 2019: Office
Office real estate defying economic slowdown
In the midst of this otherwise gloomy economic climate, the office market across the top seven cities in India continued to grow. The third quarter of 2019 has only strengthened the growth narrative set out in the beginning of this year. Nearly 12 mn sq ft of Grade A office space was completed and 11 mn sq ft absorbed during the last three months. The total office stock in Hyderabad burgeoned by more than 5 mn sq ft in a single quarter to reach Pune and Chennai levels in record time.
The office market continued to grow at a robust rate with net absorption in the first nine months of 2019, across the top seven cities surpassing the levels achieved in 2017 and 2018 full year. Similarly, the new completions during this period have already surpassed the levels witnessed in the last three years.
India office market on a higher growth trajectory
Note: Top 7 cities include Delhi NCR, Mumbai, Bengaluru, Chennai, Hyderabad, Pune and Kolkata YTD – January to September 2019. Source: Real Estate Intelligence Service (JLL)
Driven by tech companies and the rise of co-working spaces, the demand for office spaces is bound to expand further to reach historical levels by the end of this year. The demand in the office market is expected to grow at a similar momentum in the next few years. With time, this growth in commercial demand is likely to transfer into higher residential demand which augurs well for the future of the real estate market in India.