New Delhi: Commercial real estate outshone all other segments of the industry with 40 percent jump in net absorption in 2019 over 2018. The total net absorption of commercial space in 2019 stood at 46.5 million sq ft in 2019 as compared to 33.2 sq ft in 2018, accordant to a report by property consultant JLL.
The new completions also went up by 45 percent in 2019 as compared to 2018. The total new completion of commercial space in 2019 was 51.6 million sq ft while it was just 35.7 million sq ft in 2018. The vacancy levels in 2019 stood at 13 percent. The same were 13.5 percent in 2018.
The strong growth of IT and ITeS sectors in 2019 led to good absorption of commercial space in 2019 coupled with rapid expansion of co-working office players. Delhi NCR, Hyderabad and Bengaluru accounted for about 70 percent of the total absorption of the office space in the country. Mumbai saw a drop of about two percent in net absorption. This was due to limited supply of quality commercial real estate.
The total absorption in Delhi NCR was of the order of 5 million sq ft in the fourth quarter of 2019. For the whole of 2019, the net absorption in Delhi NCR was 11 million sq ft.
“Establishment of REIT will lead to developers thinking more long-term and building better quality assets. With almost all top 10 office developers having institutional partners, we expect a further flight to quality, enhanced technical upgrades of existing portfolio, smart buildings, more focus on wellness and human experience,” said Ramesh Nair, CEO & Country Head – India, JLL.
In 2020, the momentum is likely to be continued with about 50 million sq ft expected to be completed.