4 India Office Market Overview
The emergence of organised commercial real estate has supported the entry and expansion plans of large number of
corporates looking to set up base in India, besides growth of a strong domestic corporate class. Steady occupier interest
led to growth in office space absorption across the leading cities during CY2015. Overall office space absorption during
CY2015 was approximately 41 million sq ft, highlighting the strongest office demand on record. The Southern cities of
Bangalore, Chennai and Hyderabad accounted for 55% of the country¡¯s commercial absorption in CY2015. The strong
demand in the southern cities is assisting in the reduction of oversupply in their key micro-markets. A healthy increase in
office space demand is indicative of an overall improved economic sentiment among domestic and international firms.
Bangalore remained the most preferred destination for corporates looking for office space with a share of approximately
35% followed by Delhi NCR region with 21%.
The evolution of the office market in the aforementioned micro-markets was driven by a number of factors namely, availability
of land for commercial development, supporting development norms and policies by the local authorities, setting up of
IT focused townships by the state Governments through Public Private Partnerships, incentives to incoming occupiers and
developers, which led to an expansion of the quality office market and availability of quality skilled labour.
The India office market is concentrated in seven key cities in the country, which contribute to the majority of the investment
grade office stock in the country.
New Office Supply CY2015
New Office Absorption CY2015
Bangalore
36%
Chennai
8%
Hyderabad
11%
Mumbai
10%
Pune
10%
NCR
24%
Kolkata
1%
Bangalore
35%
Chennai
12%
Hyderabad
8%
Mumbai
10%
Pune
12%
NCR
21%
Kolkata
2%
(100% ¨C 37 million sq ft in CY2015)
(100% ¨C 41 million sq ft in CY2015)
Source: CBRE Research
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INDIA Economic and Commercial Real
Estate Overview
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ASCENDAS india trust ANNUAL REPORT
2015/2016
