Bengaluru with 15.3 mn sq ft and Hyderabad with 12.8 mn sq ft were the second and third largest office markets in the APAC region in terms of office leasing
India's office sector received over $2,900 mn (over Rs 21,000 crore approx) from private equity players last year, a report by Knight Frank said.
Bengaluru with 15.3 mn sq ft and Hyderabad with 12.8 mn sq ft were the second and third-largest office markets in the APAC region in terms of office leasing transactions, followed by Mumbai at 9.7 mn sq ft and National Capital Region at 8.6 mn sq ft. These cities trumped Beijing, Shanghai, Singapore, Jakarta and Kuala Lumpur.
According to the report, 2019 was a milestone year for the Indian office market. The All-India office transaction activity reached a historic high of 60.6 mn sq ft (5.6 mn sq m) in 2019, predominantly driven by demand from these three segments - IT, BFSI and co-working.
Four out of the top six cities in India except for Mumbai and NCR have single-digit vacancy levels. The problem of supply crunch is acute in markets of Pune and Bengaluru which had a city level vacancy of 4.2 percent and 4.8 percent respectively at the end of 2019, the report said.
For Mumbai and NCR, the vacancy levels maybe higher at a city level, however, for the sought-after business districts of these cities like Bandra Kurla Complex and Lower Parel in Mumbai and Golf Course Extension Road and DLF Cybercity in Gurugram, the vacancy levels are in single digits.
"The availability of vast talent in India in the fields of Science, Technology, Engineering and Mathematics (STEM) and the cost arbitrage makes India one of the most attractive office destinations for companies in the BFSI and IT sectors. A balanced demand supply equilibrium has led to double-digit rent growth in most of leading Indian markets, making the investment premise very promising and the PE investments of $ 13 billion are a testament to it," said Shishir Baijal, Chairman & Managing Director, Knight Frank India.Since 2011, the Indian real estate sector has received an equity investment of $ 22.7 billion across the office, retail and warehousing assets in the previous decade. Of the total, the Indian office assets garnered 57 percent share or $13 billion worth of these equity investments.
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