India: Office Space Absorption to See 68 % Growth in 2013..!

The absorption of office space in suburban locations is expected to increase to 68 % this 2013 year compared to 60 % in 2012, a recent survey by property consultant Jone Lang LaSalle India has said.

With the existing commercial business districts saturating, firms planning to expand their operations in the next 5 years may prefer to shift to suburban locations, the survey also said.

Highlights of JLL India Report..!.

**  Suburban locations are home to the majority of office real estate occupiers and will have a growing role in determining the performance of India's office market.

** By shifting to these location, they will be able to reduce their real estate costs and move into superior quality projects, which are available at lower rents & offer modern amenities, car parking & safety.

** Last year, the absorption of office space in India totalled to 26.7 million square feet, out of which, suburban locations accounted for more than 60% or / 16.6 million square feet.

** This absorption in the suburban locations is expected to increase further to 68% or 19.2 million square feet in 2013. These growing real estate activities in suburban locations of India provide evidence of a shift in gravity towards this market.

** The banking, financial services and insurance (BFSI) sector currently dominates the CBD market due to its willingness to pay higher rents, whereas IT / ITeS occupiers dominate the suburban market in terms of occupancy due to the availability of larger office space areas and also because the nature of their business makes them vulnerable to higher real estate overhead costs.

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