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Commercial Real Estate Demand Rises in 2019’s first three quarters

Commercial realty absorption has started to witness great demand in the initial 9 months of the year 2019 and playing a vital role to push the net demand across India by 40% to around 33 million square feet. It beats the performance of the whole year in 2018 and 2017. The net absorption was 33.2 million sq. ft. and 28.7 million sq. ft. over the last two years respectively. The net absorption rose by 105% in the third quarter (July to September) from earlier this year to around 11 million sq. ft. The net absorption is all set to cross the earlier records with this pace above 40 million sq ft. by this year’s end.

The nation has also seen a tough competition over the past three quarters of 2019 with a rise of 42% in addition to new office spaces from last year to around 36 million sq. ft. In the last nine months of this year, the new completions have already crossed the levels in the past 3 years.
Ramesh Nair, Country Head & CEO, JLL India, added, “The regulatory aspect of Real Estate Investment Trust in India has become well-established machinery for occupies and investors. Hence, the office segment has come out with great incentives for occupiers and investors in savings and returns. Now, the market is witnessing significant growth. In 2019, it is all set to have new records for new completions.”
Along with all the top markets in India, Hyderabad topped the list in new completions as well as net absorption and registered up to 44% market share in the July-September quarter. After Hyderabad, Bengaluru and Delhi-NCR have become the next market in new completions and net absorption. In the same way, the best commercial supply has constantly constrained in Mumbai.

Samantak Das, Chief Economist, JLL India, said, “The commercial market has performed greatly in seven Indian cities in 2019. Domestic and foreign investors have been chasing development opportunities and commercial assets in several major cities. The office market demand is all set to grow at the same momentum over the next couple of years.”

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