India’s Grade A office market is likely to touch 1.2 billion sq ft by 2030: JLL
NEW DELHI: The office segment in India has been one of the fastest to recover from the impact of the pandemic. The Grade A office market across the top seven cities is poised to grow to over 1 billion sq ft in size by 2026, according to JLL.
In the post-Covid world, the flex space segment is expected to grow and be a mainstream occupier segment with operator-landlord partnerships creating superior office assets. As a result of the evolution to a more distributed work model, occupiers will look at strategies to not only make their portfolio more agile but also tap into the talent pool from emerging urban centers.
The flexible space segment will play a key role in supporting occupiers’ growth strategies given the changing dynamics of portfolio optimization and employee needs.
As such, the flex market is expected to double its footprint across the top seven cities by 2025 to about 75 million sq ft and cross the 100 million sq ft mark by 2030.
Karan Singh Sodi, regional managing director, Mumbai & Ahmedabad, JLL said, “With the country’s renewed focus on making itself a manufacturing hub, engineering and manufacturing firms will set up large R&D centers here, making its office market the most dynamic in the region. It has already proved itself as the global vaccine hub making it a healthcare and life sciences R&D leader. India may potentially account for over2/3rds of all occupier activity in the Asia Pacific region.”
India’s commercial Grade A office stock across the top seven cities has a 42% green-certification penetration. The penetration of green-certified buildings is likely to cross the 50% mark overall over the next decade. In fact, new supply is likely to be greenrated to an extent of 70-75% even as older projects look to upgrade and reduce their carbon footprint.
The market capitalisation of listed REITs which stood at USD 8 billion currently is expected to grow manifold with the specialized REITs market developing in the next few years. This will also lead to increased retail participation. Consolidation of rent yielding assets across segments Institutional investments in rent yielding assets across segments will increase leading to higher consolidation of assets. Portfolio deals will become prominent.