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Office Space Demand 0f 196 Million Sq. Ft. Expected By 2013
23 Sep, 2009,
OFFICE SPACE DEMAND OF 196 MILLION SQ. FT. EXPECTED BY 2013
New Delhi, September 23, 2009: According to the investment report ‘Survival to Revival – Indian realty sector on the path to recovery’ released today by Cushman & Wakefield in conjunction with GRI India, the pan-India demand for office space for the period 2009 – 2013 is estimated to be approximately 196 million sq.ft. The Cushman & Wakefield study, also estimate 43 million sq.ft. demand for retail space, while the hospitality sector is expected to see a requirement of approximately 690,000 room nights in the same period.
Anurag Mathur, Managing Director, India, Cushman & Wakefield said, “Though the high growth trajectory of the previous years saw a setback during the global economic slowdown, the inherent strong economic fundamentals, low exposure to debt and state intervention, would help the sector to gradually return to the path of recovery and witness robust demand for real estate across sectors.”
The pan India residential demand is estimated to be over 7.5 million units by 2013 across all housing categories of which 85% is expected in the mid segment and affordable housing segment. Of the total demand expected across India, 60% would be generated in Tier 1 and 2 cities (top 7 cities). Mumbai is expected to witness the highest cumulative demand of 1.6 million units by 2013 whereas Bangalore and Hyderabad are expected to see the highest compounded annual growth rate of 14%.
Total office space demand is expected to be 196 million sq. ft. in the period under consideration of which approximately 42% is expected to be generated in the Tier 1 and 2 cities. According to the C&W report, though the office market is expected to witness a fall in demand in the year 2009 with an expected absorption of 27 million sq.ft, the period from 2010 onwards will see the markets experience a healthier demand with a CAGR of 19% from the period 2009 to 2013. The highest demand during the period under study is expected in Bangalore with a cumulative 34 million sq.ft. followed by Chennai at 27 million sq.ft. This increase in demand is largely due to improving economic conditions, positive market sentiments and growing corporate confidence.
The retail sector is expected to see demand of approximately 43 million sq. ft. essentially in the tier 1 and 2 cities. Bangalore in likely to see the highest demand with approximately 6.8 million sq. ft. Pune is expected to record the highest compounded annual growth of 51% in the retail segment.
The demand for the hospitality sector is expected to see a surge with a requirement for approximately 690,000 room nights in the period 2009 to 2013. NCR (15%) and Mumbai (14%) are expected to see the highest demand due to the higher volume of business travellers to these cities. Approximately 35% (242,000 room nights) of the pan India demand for hospitality is expected to be generated in tier 2 and 3 cities owing to various initiatives taken by the Indian government to promote commercial and tourism activity in these locations.
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