Office space supply growing at 45 per cent

Corporate-grade space supply is growing at a compound annual growth rate (CAGR) of 45 per cent and is likely to touch 100 million sq ft cumulatively over the period 2003-06 in the country.

The latest CB Richards Ellis' India Office Real Estate Supply Trends, indicates that this will cater mainly to the IT-ITES / BPO sector, which is expected to absorb around 80 per cent of the supply generated.

This year (2005) about 23 million sq ft is expected to be added, coming on top of 22.10 million sq ft added last year (2004) and 36 million sq ft added in 2003.

In 2006, corporate grade space supply is expected to touch 24 million.

"Over the last few years, the real estate sector in India has undergone a significant change. From being a very disorganised and a localised sector, it has metamorphosed into a dynamic, quality-oriented and national industry, catering to global firms (in the commercial & retail) on the one hand and the increasing upwardly-mobile population (in the domestic sector) on the other," said Anshuman Magazine, managing director, CB Richard Ellis, South Asia.

The office sector in India was miniscule as compared to the population and the geographic expanse. But due to a substantial increase in the supply in the last two years, it has reached a respectable level, he added.