Supply of office spaces are set to more than double this year to 67.9 million square feet, said a new study.
In H1 2019, the supply was 23.2 million sq ft, about 28 per cent higher than H12018, said Colliers International. It expects similar amount to hit the market in H2 2019.
At 61.3 million square feet a year, the supply of office spaces between 2019-2023 to rise 112 per cent compared to supply from 2014 to 2018, Colliers said.
“The supply has been projected on the basis of construction timelines of commercial projects, as indicated by developers across the top seven cities. Developers are focusing on completing construction of their projects in a timely manner, “ Ritesh Sachdev, head- occupier services, India & managing director, South at Colliers International India.
By the end of 2019, Colliers foresees vacancy levels to elevate due to the infusion of new supply and vacancy to be in similar range until the end of 2023.
In H1 2019, the top cities saw a gross absorption of 24.4 million sq ft , a two per cent increase from H1 2018. Bengaluru led the leasing activity with a 30 per ceent share of gross leasing in H1 2019, followed by Delhi-NCR and Hyderabad with a share of 18 per cent and 16 per cent respectively.
“Between 2019-2023, we foresee average annual gross absorption of 50.3 million sq ft, outpacing the annual average gross absorption of the preceding five-year period by about 18 per cent,” it said.
However, developers such as Vinod Rohira, managing director, commercial real estate & REIT at K Raheja Corp said that there is no major supply coming up this year. “Only in 2022, there will be siginificant supply,” he said.