According to Subash Bhola, Associate Director – Research & Real Estate Intelligence Service, JLL India, at the end of Q3 2016, India’s total Grade A office stock stood at 472 million square feet with an average vacancy rate of 15.3%. The average vacancy rate has been declining since 2013 amid strong demand from domestic as well as international office occupiers, and this trend is forecast to continue in the medium to long term.
The NCR alone contributes about 41% to total pan-India vacant stock of 72 million square feet, followed by Mumbai contributing about 28% while Bengaluru,the second biggest office market in size after Mumbai, contributes just 4.2% to pan-India vacant stock.
The strength of markets such as Bengaluru, Pune and Hyderabad lies in their competitive rents, quality assets and large floor plates, as well as the availability of skilled human resources and an established IT base. Hyderabad has excellent road infrastructure that adds to the city’s attractiveness. All these factors have resulted in strong demand for office space in these markets, which is projected to put upward pressure on office rents in those cities thus raising overall rental rates across the country.