Office space absorption in suburbs grows.
Jones Lang LaSalle India has recently conducted a survey indicating a significant increase in office space absorption this year. The anticipated growth in absorption is projected to be around 68%.
Key Findings of the JLL Survey
- In 2012, office space absorption grew by 60%. This growth is expected to be surpassed this year. The JLL survey emphasizes that companies planning expansions will focus more on suburban areas, thus boosting office space absorption in these regions.
- Existing commercial centers are expected to lose their prominence over the next five years. Companies are likely to expand into suburban locations within the next four to five years, which will greatly influence the performance of the office market.
- The suburbs are becoming increasingly attractive due to lower rental costs and better amenities and facilities. This shift will impact the demand for office space in central business districts.
Suburbs receive increased office space absorption.
Office Space Absorption Trends in 2012 and Beyond
- In 2012, approximately 26.7 million sq. ft. of office space was absorbed. About 60% of this absorption occurred in suburban locations, totaling around 16.6 million sq. ft. This rate is expected to increase to 19.2 million sq. ft. this year.
- The increased office space absorption in suburbs reflects a shift in commercial activities in the region. The survey forecasts more commercial activities in suburbs in the coming years.
Benefits of Suburban Office Locations
- Companies planning to move to suburbs anticipate enjoying more space and amenities at lower rates. This shift will impact the demand for office space in central business areas.
The JLL survey underscores the evolving landscape of commercial real estate, with suburban areas emerging as viable and cost-effective solutions for businesses seeking expansion.