Demand for office space in 2014: Bangalore tops the chart
The year 2014 is likely to be an eventful year for the real estate market of India, as a number of activities may spurt in the days to come. Post-election, the economy is expected to become more stable and the absorption trend is likely to pick up pace in major markets such as Bangalore, NCR and Mumbai.
As per market experts, the office market is likely to experience a steady absorption rate, and lure large numbers of occupiers. Growth is expected to step in from the second half of 2014, with an increase in the number of leasing activities on account of expansion of existing companies and entry of new firms.
Demand will pick up
Rise in the absorption rate of office space will trigger the demand for residential units in the country in 2014. According to common opinion, post the elections the market will again gain momentum, since all the speculations on regulations and norms will be clear. Investor’s sentiments get a positive feedback when the government is stable in a country.
The persisting demand for commercial space will strengthen the real estate sector in 2014 and 2015. The oversupply situation, which is being cited in most of the cities, will come into terms in 2014 as domestic and global economic conditions become better.With demand picking up due to stability, prices will jack up considerably.
Bangalore over other cities
Bangalore has acquired the top slot in the net absorption segment and is expected to register 32 msf between 2013-17, followed by Mumbai and NCR at 24 msf and 23 msf respectively.Pune and Hyderabad ranked fourth and fifth absorbing nearly 14 msf each, while at 6th position Chennai absorbed 11 msf.
Furthermore, overall economic improvement and expansion of the companies will further give a facelift to the city contributing 16% growth in the office demand in 2014, as compared to last year. The sub-urban localities, Outer Ring Road and Whitefield will be subjected to majority of the demand in the city. Private equity players have shown interest in projects with strong fundamentals and the IT hub of the nation has emerged as the top preference for foreign investors, as shown by the trends of last two years.
