Office Space Supply up 31% in January-June 2019: Report
Supply of office space across eight Indian cities rose by 31 per cent during the first half of 2019 on a year-on-year (YoY) basis to 22 lakh square metres, a Knight Frank report said on Tuesday.
"Office space market experienced a decadal high (half yearly) volume in supply and transactions in H1 2019. Office supply increased by 31 per cent year-on-year (YoY) to 2.2 million square metres (23.9 million square feet) in the current analysis period, the highest level achieved in this decade," said the report.
Transaction levels also recorded a similar high in the decade of 26 lakh square metres for space transacted in a single period during the first half of 2019 due to demand from IT and IT-enabled services and co-working spaces, it said.
"Bengaluru hit a historic high in transactions as well as supply during H1 2019 with transactions hitting 8.3 million (83 lakh) square metres while supply increased by over 100 per cent at 7.6 million (76 lakh) square metres in H1 2019."
Average rental values across the eight cities grew by 10 per cent YoY during the January-June period. Ahmedabad experienced the maximum YoY rental growth of 14.3 per cent, while Bengaluru and Hyderabad grew at 13.5 per cent and 11.3 per cent YoY respectively.
The other cities where the survey was carried out were Mumbai, the National Capital Region, Pune, Chennai and Kolkata.
Commenting on the report, Shishir Baijal, Chairman and Managing Director of Knight Frank India said: "Double digit rental growth in five out of eight markets reiterates the underlying strength of Indian office market. The spurt in demand for higher-end roles in the Artificial Intelligence and data security domains have led to a welcome and significant 59 per cent YoY increase in demand from the IT/ITeS sector during H1 2019. Co-working spaces continue to drive transaction volumes and influence occupier demand."
As per the report, Co-working space providers took up approximately 3.7 lakh square metres constituting about 15 per cent of all transactions across top eight cities during H1 2019, a substantial increase of 42 per cent over H1 2018.
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