Inactivity in office space absorption to end soon - PowerPoint PPT Presentation


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Inactivity in office space absorption to end soon


As we all know, India has seen a significant fall in office space absorption in the first quarter, but the experts say that it’s just temporary, and the sluggishness will end in the coming quarters. As India has been a favorite outsourcing destinations for many multinationals, the commercial real estate market will be back to form very soon. – PowerPoint PPT presentation

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Title: Inactivity in office space absorption to end soon

Inactivity in office space absorption ends soon
in India
Office space absorption in Q1 2016
  • Office space absorption in India saw a
    significant decline in the first quarter of 2016.
  • The first quarter registered the absorption of
    about 5 million sq. ft.
  • It is actually a drop of 26 when compared to the
    same quarter (Q1) of the previous year.

Representation of office space absorption and
vacancy rate in Q1 2016
  • According to a popular real estate advisory firm,
    most of the companies were busy making their
    plans for the year.
  • Experts view is clear that they dont want to
    give up the commercial real estate market in
  • They say that the market sentiment is still
    optimistic even after a bit disappointing first
  • The reason they give is that, India is one of the
    favorite outsourcing destination for many
    multinationals, and its true also.

Pictorial representation of outsourcing in Asian
Delhi, Mumbai and Bengaluru Leads in Absorption
  • Delhi NCR accounted for the 31 of the overall
    office space absorption during the period,
    followed by Mumbai (contributing 23) and
    Bengaluru (17).
  • Gurgaon seemed to have evoked a healthy interest
    among the corporates, while Navi Mumbai, Thane,
    and Vikhroli saw some prominent activity in
    Mumbai market.
  • Similarly, Whitefield, Koramangala and Electronic
    City are the areas that witnessed major
    activities in Bengaluru.
  • The first quarter also saw a few occupiers
    pre-committing to the space when they are still
    under construction, mainly in Mumbai and Gurgaon.

Absorption rate in Delhi, Mumbai and Bengaluru
Very Few Large-sized Transactions during the
  • In terms of size, the transactions that are less
    than 10,000 sq. ft. holds 44 of the share.
  • The medium sized transactions ranging between
    20,000 and 50,000 sq. ft. holds the share of
    about 19.
  • The large-sized transactions (greater than
    100,000 sq. ft.) had a very less share of about

  • Seeing the reports, the experts have foreseen
    that the next three quarters of the on-going year
    are sure to see a rise in leasing activity.
  • As the corporate firms based out in other
    countries continue to expand their operations in
    India, the demand for office space is going to
    rise and hence the absorption.
  • But with the developed infrastructure as well as
    availability of the cost-effective spaces,
    peripheral locations may also witness increased

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Thank You
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