The purpose of market research is to gather data on customers and potential customers. The collected data aids business decision making.
As per the ongoing trends, the face of India’s office sector is evolving at a rapid pace. From urbanization of Indian cities to the upcoming of premium green buildings to the rise of megastructures to the introduction of various policies favoring the growth of strong commercial real estate industry, a number of factors continue to drive the segment’s growth.
Owing to these factors and rising investor interest in the Indian market, the country has witnessed a strong growth of offices during the year 2018. By the end of 2018, the total office leasing all across was recorded to be over 32 million sq ft. In fact, the growth of the office sector until 2020 is predicted to be really strong. This year, India will also see the announcements and subsequent listings of a number of real estate investment trusts (REITs). This will push the real estate industry in a new era and will assist in the development of more high-quality Grade A offices.
With the growing amount of leasing and investors’ activity, the office segment once dominated by information technology (IT/ITES) sector companies is now witnessing leasing by non-IT companies from other sectors. Hence, BFSI, consultancy business, telecom, healthcare, biotech, real estate construction, e-commerce, and co-working service providers are actively taking up spaces.
The increase in demand from non-IT clients across cities is evident from the changing pattern in occupier distribution being observed.
A city-wise glance of space take-up by non-IT/ITeS clients reveals that while in Bengaluru, Delhi/NCR and Chennai it is the manufacturing/industrial sector that has been leading in space take-up from 2013 to 2018, in Mumbai and Pune, BFSI has been the most prominent one. For Hyderabad, while BFSI was the most prominent sector in non-IT/ITeS space take-up in 2013-2016, gradually the emerging E-commerce sector and consultancy have started gaining prominence in 2017 and during first three quarters of 2018. In Kolkata, manufacturing or industrial had the highest share of non-IT/ITeS office space in 2013-2016 which changed to consultancy gaining prominence in 2017. However, that too later went back again to the manufacturing/industrial sector during the first three quarters of 2018.
A number of other alternatives, including co-working, data centres, educational institutions, and healthcare facilities are increasingly gaining importance. As a result, we are witnessing the development and construction companies focusing on these segments as well. For example, a comparison of the cumulative co-working space was taken up by different service providers across the top 7 cities till 3rd Quarter of 2017, whereas there was not a substantial increase in 2018. While in the first nine months of 2017 the space take-up was 1.11 million sq ft, it increased more than three times to 3.44 million sq ft during the first nine months of 2018.
With the growth, new-age modern offices, occupiers, and companies will focus on developing a well-Certified environmentally healthy and sustainable green buildings that offer flexible and a clean environment to the workforce. And trends suggest that the country will continue to see an upgrade in already existing supply on these lines.
With increasing transparency in the market, the supply of offices is bound to increase in the coming years.