The demand for office space has risen 23% in the first quarter of 2018, compared with the same period last year, with pan India absorption recording 11.4 million sq ft of commercial space.
With the intensifying office demand, the rental values also have increased in several active micro-markets across India.
Of the top 10 micro-markets that witnessed highest on-year growth in rentals, six were in Bangalore with 11-26% rise, showed a Colliers International report.
Limited availability of Grade A office space in preferred micro markets has primarily led to the rental rise in select micro-markets of Delhi NCR, Kolkata and Hyderabad as well.
“The commercial real estate market is likely to remain robust with increased investor activity, sustained demand from technology companies and growing interest from various industry occupiers like manufacturing, flexible workspace, logistics and warehousing.
The demand will be well supported by Grade A new office supply of about 117.0 million sq ft, which is scheduled for completion over 2018-2020,” said Ritesh Sachdev, Senior Executive Director, Occupier Services at Colliers International India.
Bengaluru’s Bannerghatta Road topped the list with 26% on-year rise in rentals, Central Business District followed with 25% growth, while Electronic City and Secondary Business District including Indiranagar and Koramangala saw rentals appreciating 17.6% and 14.3%, respectively.
Kolkata’s Sector V micro-market recorded a 14% on-year escalation in rents during the period. Bengaluru’s Outer Ring Road witnessed 12.7% rise and Whitefield micro-market witnessed an increase of 11.1%.
Connaught Place, the Central Business District area of Delhi NCR, witnessed an annual rental increase of 10.8%, while rentals in Delhi Aerocity rose 10.8%, the report said.