Commercial_Real-Estate
After initial setbacks in the primary quarters of 2012, demand for commercial real estate space is recovering. India's seven key commercial hubs demonstrated accelerated growth in the third quarter of 2012. This period, spanning from July to September, reflected a surge in A-Grade workplace absorption across major commercial real estate centers.
Office Space Absorption
Total office area absorption is estimated at 7.6 million sq. ft. during this period. Among Mumbai, Bangalore, Chennai, Hyderabad, Delhi-NCR, Pune, and Kolkata—the country's seven primary real estate hubs—Bangalore emerged as the leader. This figure surpasses the previous quarter’s 5.9 million sq. ft., indicating a prior slowdown in commercial real estate for the period between April and June.
Market Leadership
According to a report by DTZ, a globally recognized property consultancy, Bangalore is spearheading this expansion. The city recorded 3 million sq. ft. of office space absorption from July to September, marking a sequential growth rate of 67%. Hyderabad secured the second position with a 56% growth rate in commercial office space demand.
Regional Performance
Mumbai experienced a significant 117% increase, reaching 0.91 million sq. ft., primarily due to demand from financial institutions and banking. The pharmaceutical industry also contributed to overall growth, although this increase remains slightly below the previous year’s 1.03 million sq. ft. mark.
India’s total commercial area supply showed a sequential growth rate of 188%, with Mumbai witnessing the largest growth at 449%. However, the Delhi-NCR region experienced a 28% sequential decline, attributed to reduced office space demand from consulting and manufacturing firms.
Industry Outlook
DTZ India's CEO, Mr. Anshul Jain, conveyed optimism regarding the economy’s positive impact on real estate markets, despite initial setbacks. The group expressed confidence in the resurgence of the commercial real estate sector and expects a considerably higher growth rate. Rental rates in the commercial real estate market remained steady nationwide from July to August.
Rental Market Dynamics
However, the Bangalore Outer Ring Road region and Kolkata’s Central Business District (CBD) were exceptions. Kolkata CBD saw a 5% increase, while Bangalore's Outer Ring Road only experienced 4% growth. Increased pre-leasing activity and constrained availability of A-Grade office space contributed to the rise in commercial rental rates in these areas.