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Office Market Outlook ‘Optimistic’ backed by robust leasing volumes

BY Realty Plus

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In the recent survey by Knight Frank-FICCI-NAREDCO titled ‘Real Estate Sentiment Index Q4 2019 (October – December) ’, real estate stakeholders have continued to express an optimistic outlook for the office sector for the first half of 2020. This is backed by the tremendous growth that the India’s office sector has been witnessing in the last few years. Office market outlook corroborates with the current market trends, where the leasing volume touched an all-time high of 5.6 million square metre (60.6 million square feet) in 2019, backed by a surge in leasing activity by the Information Technology segment. New completions also increased by 56% year-on-year in 2019, to 61.3 million square feet, marginally surpassing demand.

OFFICE MARKET OUTLOOK Q4 2019POSITIVE MOMENTUM TO CONTINUE

  • Stakeholder sentiment regarding the outlook for office leasing remained strong, with 88% of respondents opining that leasing activity will either improve or remain the same.
  • The outlook for new office supply remained positive, with 95% of the stakeholders expecting supply to remain same or increase across geographies.
  • Stakeholders' outlook with regards to future office rental appreciation also remains positive, with 91% of the stakeholders expecting rentals to either remain or even appreciate in micro markets with high demand.

Shishir Baijal, Chairman and Managing Director, Knight Frank “The stakeholder sentiments for office segment has been high due to strong performance and firm rental values allowing investors to make mid to long term investments with healthy rental incomes. Further, as we see, the revival of the Information Technology segment in India in the last few years has been creating strong demand for quality office space. India is now fast becoming a centre of high-end IT services and engineering with data centres, R&D centres and other important functions being based within the country.”

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