Real estate stakeholders optimistic about office market on robust leasing volumes

Real estate stakeholders have continued to express an optimistic outlook for the office sector for the first half of 2020, according to a recent survey by Knight Frank-FICCI-NAREDCO titled 'Real Estate Sentiment Index Q4 2019 (October to December).

This is backed by the tremendous growth that India's office sector has been witnessing in the last few years.

Office market outlook corroborates with the current market trends where the leasing volume touched an all-time high of 5.6 million square metres (60.6 million square feet) in 2019, backed by a surge in leasing activity by the information technology segment.

New completions also increased by 56 per cent year-on-year in 2019 to 61.3 million square feet, marginally surpassing demand.

Stakeholder sentiment regarding the outlook for office leasing remained strong with 88 per cent of respondents opining that leasing activity will either improve or remain the same.

The outlook for new office supply remained positive with 95 with of the stakeholders expecting supply to remain the same or increase across geographies.

Stakeholders' outlook with regards to future office rental appreciation also remains positive with 91 per cent of the stakeholders expecting rentals to either remain or even appreciate in micro markets with high demand."The stakeholder sentiments for office segment has been high due to strong performance and firm rental values allowing investors to make mid- to long-term investments with healthy rental incomes," said Shishir Baijal, Chairman and Managing Director of Knight Frank India.

The revival of information technology segment in the last few years has been creating a strong demand for quality office space. India is now fast becoming a centre of high-end IT services and engineering with data centres, R & D centres and other important functions being based within the country," he said in a statement.