A report by Cushman & Wakefield, Commercial Office Real Estate: Positive Disruptions- Beacons of Change, suggest that the average commercial real estate supply in top Indian cities is expected to be at 40-45 million sq. ft. per year until 2020. Here are few observations stated in the report:
- The next two years are likely to witness an increase in investments into the office sector as new investment grade projects come into supply.
- Net absorption of office space until September has been recorded at around 18 million sq. ft. led by Bangalore that has registered highest volume of 4.8 million sq ft, showed a Cushman & Wakefield report.
- Although the first nine months have seen a marginal on-year decline of 7% in absorption across these eight major cities, the trend for office space absorption has been looking positive.
- As foreign entrants eye a pie of the market potential, co-working spaces continue to gain pace.
- It is expected that the inflows by large developed firms will see a four-fold rise to Rs. 240 billion.
- The commercial office realty is expected to see greater participation of foreign institutional investors as they continue to pick up leased and under-construction assets in India.
- The sector will see change because of institutionalization. As institutional investors gain ownership in commercial office assets, we will see better corporate governance and best professional practices.