Annual commercial space absorption is likely to touch nearly 50.3 million sqft between 2019-2023 mainly driven by sectors like IT-BPO, pharma, engineering and manufacturing, a recent survey said.
Annual commercial space absorption is likely to touch nearly 50.3 million sqft between 2019-2023 mainly driven by sectors like IT-BPO, pharma, engineering and manufacturing, a recent survey said. According to a survey by RICS-Colliers International, the annual absorption of 50.3 million over the period will outpace the annual average gross absorption of the preceding five-year period by about 18 per cent from 42.5 million sqft.
“We expect demand to be driven by IT-BPO occupiers, as well as pharmaceutical, engineering and manufacturing companies, for their global in-house centers (GICs),” it said. As per the report, in 2019, almost 68 million sqft of commercial space is likely to come onboard, hinging on timely completion and approvals from regulatory authorities.
The report, however, noted that due to the significant increase in supply of commercial space, vacancy levels are also expected to inch upwards by the end of 2019 to 15.1 per cent from 10.6 per cent at the end of 2018.
Leasing by GICs across six major cities in India is expected to be in the range of 32.5 million sqft between 2019 and 2021. Over 2014-2018, occupiers leased about 53 million sqft of office space in multi-tenanted buildings for their GICs. During 2019, the gross absorption in Bengaluru is expected to touch about 14 million sqft, accounting for about 28 per cent of total gross absorption across Indias top seven cities.
“We believe Hyderabad as an attractive alternative location for technology occupiers placed seventh on Asia list. The gross absorption in Hyderabad is expected to touch about 9.5 million sqft during 2019, for the first time ever, led by technology companies and flexible workspace operators,” it said. As per the study, leasing by flexible workspace operators are expected to touch 8.8 million sqft as against last year. “We believe that leasing by flexible workspace operators should account for about 19 per cent of total gross leasing in 2019,” the report said.